The ISM US Manufacturing PMI increased to 48.7 in August 2025 from 48.0 in July, though it fell short of market expectations of 49.0. The index signaled a sixth straight month of contraction, as a sharp drop in production (47.8 vs. 51.4) was only partly offset by a rebound in new orders (51.4 vs. 47.1). Employment continued to fall, though at a slightly slower pace (43.8 vs. 43.4). Customers’ inventories (44.6 vs. 45.7) and order backlogs (44.7 vs. 46.8) shrank more quickly, pointing to weaker demand conditions. The gauge for input price inflation eased to 63.7 from 64.8 but remained elevated overall. Survey respondents overwhelmingly pointed to tariffs as a drag on business conditions, citing higher costs, supply chain disruptions, and reduced competitiveness.