This week’s global economic indicators paint a muddled picture for the state of manufacturing activity around the world. Sweden’s manufacturing PMI has declined, although Norway is exhibiting uplifting signs of post-recession revival. Meanwhile, trade negotiations continue to loom large, particularly for the United States, as it seeks proposals from various countries on tariffs and digital trade ahead of impending deadlines.
In Sweden, the manufacturing PMI posted a 0.6-point decline, from 54.2 in April to 53.6 in May. This sharp decline is the first indicator of a growth deceleration trend that is hitting the sector. This falloff has led some economists to wring their hands about the effect on US economic performance. Other notable PMI Norges Bank’s manufacturing PMI scored a strong comeback, soaring from 46.2 to a firm 51.2. This upbeat reversal is a hopeful sign of a manufacturing resurgence after six consecutive months of contraction.
Similarly in the U.S., the ISM manufacturing PMI for May came in at 48.5. This figure—0.4—suggests that manufacturing activity is still in contraction mode. This statistic highlights the incredible difficulties U.S. manufacturers are experiencing due to a rapidly changing and still evolving supply chain landscape and demand environment.
Regional Variations in Manufacturing Performance
In Asia, China’s Caixin manufacturing PMI recorded the biggest fall, dropping to 48.3 in May from 50.4. This drop marks the largest month-to-month contraction in new manufacturing activity. The unexpected decline raises new questions about whether China’s recovery from COVID-19 can be sustained. Combined, it will likely disrupt global supply chains dependent on Chinese production.
Interestingly though, the Euro area seems to have received a powerful kick to its manufacturing sector all through 2025. The PMI jumped from 45.1 in December 2024, indicating this stunning turnaround. This steadily rising trajectory indicates that need is increasing. At the same time, member states’ supply chains are continuing to recover as businesses adjust to a new economic reality.
And the Euro area’s unemployment rate may remain unchanged at an all-time low of 6.2% in April. This unexpected stability, through all the shocks and external environmental pressures, continues to support the narrative of economic resilience. These numbers suggest a curious mix of elements, where congestion, investment and other forces have combined to shape the economic performance of various areas.
Trade Negotiations and Economic Security
In the realm of trade, the U.S. government is actively soliciting proposals on tariffs, quotas, digital trade, and economic security from various countries. This initiative, the Competition Council, is an attempt to shore up U.S. economic advantages during a time of wrestled negotiation. The Trump administration has been urging countries to submit their best offers by this past Wednesday. They underscore the urgency of getting good deals done quickly.
While the U.S. is still negotiating a new trade agreement, the U.S. has threatened new sanctions if significant progress isn’t achieved soon. These industry strides increase in significance as global trade patterns continue to be volatile due to geopolitical disputes and economic turmoil.
This hour, Federal Reserve’s Cook and Logan already expected to address wholesale market participants this evening. Given the ongoing rise of inflation fears, their thoughts can help inform ideas of what the future path of monetary policy could look like.
Currency Movements and Market Reactions
The Norwegian Krone (NOK) is currently sparkling as the world’s best performing G10 currency. Increasing oil prices are padding Norway’s economic fortune and underscoring its success. The NOK’s strength reflects investor confidence in Norway’s economic recovery and robust energy sector performance.
In the U.S., yields jumped by 4-6 bps on the curve over the past session. This movement is a testament to the market’s ambivalence to constant mixed economic signals and the enduring reality that is our trade war. This sharp increase in yields could presage a recalibration of expectations regarding the future path of interest rates and the economy more generally.
In just a few days the U.S. will release the JOLTs labor turnover survey for April. This vital data will provide insight into the labor market and will help guide future decisions by the Federal Reserve on interest rates and monetary policy.