Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said that while manufacturers continued to ramp up production in December—suggesting that the goods-producing sector will contribute to further strong economic growth in the fourth quarter—the outlook for early 2026 appears less optimistic. In fact, the gap between production growth and the decline in orders is the widest it has been since the 2008–2009 global financial crisis. Unless demand improves, current factory output levels are clearly unsustainable. If production capacity has to be scaled back, employment will also be adversely affected. A key factor fueling concerns about sales is the extent to which manufacturers will have to pass on higher costs to consumers in the form of price increases, with rising costs still largely attributed to tariffs. Input cost inflation slowed in December to its lowest level since January of last year, providing some encouragement. However, while this cost trend suggests that the impact of tariffs on inflation peaked as early as the summer, costs are still rising at a faster pace month over month, indicating that cost growth for U.S. businesses continues to outpace that of competitors in most other major economies.