While many government data points are not up-to-date since the federal shutdown ended November 12 (most recent job hires data is for September, most recent new orders data is for August), there are still enough tea leaves for analysts to examine to plot the state of manufacturing.
First, ISM’s latest Purchasing Manager Index barely contracted in October, from 49.1 to 48.7 percent, which is barely in contraction range – and yet, considering manufacturing has been in contraction territory for all but two months since November 2022, it shows a consistent long-term trend of constrained business. And it flies in the face of the rest of the economy’s continued expansion since May 2020. Similarly, we know the manufacturing workforce is shrinking while the rest of non-farm employment is growing – 6,000 fewer manufacturing jobs in the sector in September (a continuing month-to-month losing streak that started in May, for a total job loss of 94,000 in 2025). Second, we know that while new orders eight months into the year are ahead of where they were in 2024 – durable goods are, in fact, 7% higher in 2025 than 2024 – much of this is due to companies essentially stocking up in Q1 and Q2 in the face of pending increased tariffs.
While, as noted above, the U.S. economy has expanded for 66 straight months (according to ISM), the IMF’s latest forecast for growth shows a notable slowing this year in the United States, from the 2.8% GDP growth we experienced in 2024 to 2.0% in 2025, despite the increase in AI investment (see below). Their report includes guidance to all nations: “Policymakers are urged to restore confidence through credible, transparent, and sustainable policies.”
Speaking of AI investment, Four of the “Magnificent Seven” – Alphabet, Meta, Microsoft, and Amazon – expect their capital expenditures on AI to top $380 billion this year. And then there’s OpenAI, which is in the midst of a $1 trillion infrastructure deal with Nvidia, Oracle, and Broadcom. Is this an AI bubble or isn’t it? While the jury is still out (and will likely be for some time to come), the Washington Post provided an interesting analysis recently, which you can find here (subscription required).
Don’t forget to check out our quarterly business cycle index here.
(Updated 11/24/25)
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