Chicago purchasing manager index rose significantly in December, but the US manufacturing sector remains in contraction territory.

The latest manufacturing data from the United States signals "marginal improvement, but not yet out of the woods". The data released on Tuesday showed a significant rebound in the December Chicago Purchasing Managers' Index, better than market expectations, but the index still remains below the 50 line, indicating that manufacturing activity is still in a contractionary state. According to data published by the Institute for Supply Management, the Chicago PMI rose to 43.5 in December, significantly higher than November's 36.3, and also above the market's general expectation of around 39.8. This rebound indicates some signs of recovery in the manufacturing sector in the midwestern United States after a significant decline. However, the index remains well below the 50 mark, which separates expansion from contraction, meaning that overall manufacturing activity is still in a contractionary range. Analysts point out that although there have been improvements in new orders and production, demand recovery remains unstable, and businesses are still cautious about future orders. The Chicago PMI is considered an important regional indicator for the overall trend of manufacturing in the United States, and its fluctuations often lead the national ISM manufacturing index. This rebound is interpreted by the market as more of a "technical repair" than a "trend reversal," indicating that manufacturing may be bottoming out, but not enough to confirm that a recovery has begun. In the financial markets, the overall reaction of U.S. stocks to the data was relatively muted after its release. The Dow Jones Industrial Average edged down slightly in early trading, with investors focusing more on the upcoming release of the minutes from the December Federal Reserve meeting, hoping to find further clues about the interest rate path in 2026. Looking ahead, market participants believe that if the Chicago PMI can continue to rise and approach 50 in the coming months, it will help alleviate concerns about a deep slowdown in U.S. manufacturing. However, with uncertainties still existing in interest rate policy and weak business investment sentiment, the pace of manufacturing recovery may still be relatively slow.