Weekly Market Commentary December 8, 2025

WEEK IN REVIEW

The first week of December delivered a series of key U.S. economic indicators, offering a clearer picture of the nation’s growth trajectory as the year draws to a close. Markets and policymakers focused on fresh data from the manufacturing and services sectors, labor market trends, and inflation pressures, each providing important signals about the health and direction of the economy.

U.S. manufacturing activity remained in contraction during November, with the ISM Manufacturing Purchasing Managers’ Index (PMI) at 48.2, signaling ongoing softness in factory output and demand. Respondents cited weak new orders and cautious inventory management, underscoring persistent headwinds for the industrial sector despite some stabilization in supply chains.

The service sector continued to show strength, with the Services PMI registering 52.6 in November. This reading indicates solid expansion, supported by robust business activity and steady employment gains. Service providers reported healthy demand across consumer-facing and professional segments, helping to offset some of the softness seen earlier in the year. The resilience of services remains a key pillar for the U.S. economy, especially as manufacturing recovers.

Labor market conditions remained favorable, as initial jobless claims fell to 191,000 for the week. This is a notable decrease from the prior week and marks one of the lowest levels in recent months. The low number of claims signals that layoffs are limited and that employers are largely holding onto workers, even as hiring slows. This stability in the labor market supports consumer spending and underpins overall economic confidence.

Inflation pressures persisted but showed signs of moderation. The Core Personal Consumption Expenditures (PCE) Price Index — the Federal Reserve’s preferred inflation gauge — rose 0.2% month-over-month and 2.8% year-over-year in September (the most recent available data). These figures indicate that underlying price growth remains elevated but is gradually easing, aligning with expectations for a cautious approach from policymakers as they monitor inflation trends.

Click HERE to read more.