Weekly Economic Outlook: January 05-11, 2026
- Remin Francis I R
- 3 days ago
- 2 min read
Last week offered a mixed picture across global economies, with growth holding up in some areas while others showed clear signs of cooling.
In the US, manufacturing remained under pressure. The ISM Manufacturing PMI slipped further to 47.9 in December 2025, its third straight monthly decline and the lowest since October 2024. Production eased to 51 from 51.4, inventories fell sharply to 45.2 from 48.9, and price pressures stayed elevated at 58.5. New orders improved slightly to 47.7, export orders rose to 46.8, and employment contraction slowed to 44.9, suggesting demand may be stabilising, though a sustained recovery will need consistency over several months.
In contrast, the US services sector showed renewed strength. The ISM Services PMI climbed to 54.4, up from 52.6, marking the strongest expansion since October 2024. Business activity, new orders, inventories, and employment all improved, helped by seasonal demand and year-end activity. Importantly, price pressures eased marginally to 64.3, offering some relief on the inflation front.
The US labour market, however, continues to cool gradually. Job openings fell to 7.146 million in November, while payroll growth slowed to 50K in December. For the full year 2025, payrolls rose by 584K, averaging 49K per month, well below the 2.0 million increase seen in 2024. The unemployment rate edged down slightly to 4.4%, but participation also dipped to 62.4%.
In India, growth momentum moderated but remained firmly in expansion territory. The HSBC India Composite PMI eased to 57.8, its lowest reading of the year, with new orders rising at the slowest pace in 25 months and hiring stalling. Services PMI softened to 58.0, with employment dipping marginally for the first time since May. Still, export orders improved, and price pressures remained modest.
On the macro front, India’s GDP is expected to grow 7.4% in FY26, up from 6.5%, driven by stronger government spending (5.2%) and capital formation (7.8%), reinforcing India’s position as the fastest-growing G20 economy.
Globally, inflation trends were mixed. Euro area inflation eased to 2.0%, back at the ECB’s target, while China’s inflation edged up to 0.8%, its highest since February 2023 but still below target.
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