Market News: U.S. Manufacturing PMI Stays Below 50 for 7th Month, Signaling Weak Growth and Tariff Pressures

The U.S. ISM Manufacturing PMI — a key gauge of industrial activity — remained below the neutral 50-point threshold for the seventh straight month, signaling continued contraction in the manufacturing sector.A sustained move above 50 would mark renewed expansion, a condition historically aligned with stronger Bitcoin price performance as risk appetite improves alongside broader economic growth.Manufacturing Fails to Hold Early-Year MomentumEarlier this year, the PMI briefly climbed above 50, indicating short-lived optimism before slipping back into contraction territory. The reversal underscores the ongoing struggle of U.S. manufacturing to sustain momentum amid tariffs, trade uncertainty, and weak global demand.According to the latest ISM report, September saw a modest uptick in the index, with input prices rising even as exports and imports contracted, suggesting uneven performance across manufacturing subsectors.“Business continues to be severely depressed,” one purchasing manager from the transportation equipment industry told ISM in September, citing shrinking profits and rising costs from tariffs.“We have increased price pressures both to our inputs and customer outputs as companies are starting to pass on tariffs via surcharges, raising prices up to 20%,” the manager added.Tariffs and Global Weakness Weigh on OutlookThe manufacturing rebound seen earlier in 2025 was partly driven by business optimism surrounding the Trump administration’s pro-industry agenda. However, analysts note that persistent high tariffs, policy uncertainty, and subdued external demand have kept the sector from achieving a sustained recovery.Despite the prolonged contraction, ISM emphasized that manufacturing now accounts for a smaller share of U.S. GDP, meaning a PMI below 50 does not necessarily imply a recession.Historically, the institute observed that a reading above 42.3 generally corresponds with overall economic expansion, even if manufacturing output itself remains soft.Implications for Bitcoin and Risk AssetsPeriods of manufacturing contraction have often coincided with easing monetary conditions, as the Federal Reserve seeks to support growth through rate cuts — a dynamic that typically benefits Bitcoin and risk assets.If the PMI manages to rebound above 50 in the coming months, it could reinforce expectations of a broader U.S. economic recovery, potentially adding another bullish macro tailwind for Bitcoin, which has historically rallied alongside improving business sentiment and liquidity cycles.