On December 13, 2025, new data revealed that U.S. business activity growth had eased significantly, reaching its lowest level in six months. According to preliminary figures from S&P Global, the composite purchasing managers index (PMI) dropped to 53.0 in December, down from 54.2 in November. While still remaining above the threshold that indicates economic expansion, this decline signals a considerable slowdown in the pace of growth. The PMI is a key economic indicator that combines data from both the manufacturing and services sectors, providing a snapshot of overall business activity.
This deceleration in growth was primarily driven by weaker momentum in both new orders and output across these sectors. In particular, the manufacturing industry faced declining demand for goods, which has contributed to the slowdown. Similarly, the services sector also saw a cooling of business activity, a trend that could be attributed to a range of factors, including ongoing labor shortages, rising input costs, and softening consumer demand.
The slowdown in business activity has raised concerns about the resilience of the U.S. economy as it heads into 2026. Analysts suggest that the combination of these challenges could make it harder for the economy to maintain its growth trajectory in the coming months. The labor market has remained tight throughout the year, with companies continuing to face difficulties in filling open positions, which has placed added pressure on business operations. Meanwhile, rising input prices, driven by inflationary pressures and supply chain disruptions, have made it more expensive for businesses to produce goods and services.
The drop in demand for goods and services is also noteworthy, particularly as businesses grapple with the changing dynamics of consumer behavior. As inflation continues to impact household spending power, many consumers are becoming more cautious about their purchasing decisions, which could weigh on future economic activity. The recent slowdown in business growth also raises concerns about whether the current economic expansion, which has been ongoing for several years, can be sustained in the face of these emerging challenges.
Furthermore, 2025 has been a year marked by significant external pressures on the U.S. economy, such as policy changes, ongoing international trade tensions, and disruptions tied to a prolonged federal government shutdown. These factors have further complicated the economic landscape, contributing to the uncertainty that businesses are currently facing. The government’s inability to quickly resolve critical issues has exacerbated concerns about the stability of the economy and the potential for future economic disruptions.
The latest data underscores the complexity of the current economic situation. While the economy has managed to remain in a growth phase, the slower pace of business activity in December signals that the expansion may be losing some of its momentum. Heading into 2026, many economists are now questioning whether the U.S. economy can continue its growth trajectory or if it will face a period of slower growth or even contraction.
As the year comes to a close, the outlook for the U.S. economy remains uncertain. While the PMI reading indicates that businesses are still expanding, the lower figure compared to previous months highlights the challenges ahead. The ability of U.S. businesses to adapt to these changing conditions, manage costs effectively, and navigate the broader economic landscape will likely determine the direction of the economy in the coming months.
With analysts keeping a close eye on these developments, the coming months will be critical in shaping the economic outlook for the U.S. in 2026 and beyond. The current slowdown, while not signaling a recession, does suggest that the economic expansion may be entering a more cautious phase, with risks of further deceleration if underlying challenges are not addressed effectively.
