Group 1: PMI Overview - In September 2025, the manufacturing PMI rose to 49.8%, up 0.4 percentage points from the previous value of 49.4%, but still in the contraction zone[2] - The non-manufacturing PMI fell by 0.3 percentage points to 50.0%, indicating a slight decline in service sector activity[2] - The composite PMI output index increased by 0.1 percentage points to 50.6%, suggesting a slight acceleration in overall economic expansion[2] Group 2: Supply and Demand Signals - The supply side showed improvement with the production index at 51.9%, up 1.1 percentage points, remaining in the expansion zone for five consecutive months[3] - The new orders index rose by 0.2 percentage points to 49.7%, indicating continued contraction, but new export orders increased by 0.6 percentage points[3] - The September export order index rose to 47.8%, while the import order index slightly increased to 48.1%[3] Group 3: Price and Inventory Trends - The price indices for raw materials and factory prices fell by 0.1 and 0.9 percentage points respectively, indicating a potential narrowing of PPI declines[4] - Inventory levels increased, with raw material and finished goods inventories rising by 0.5 and 1.4 percentage points respectively, likely due to production recovery[4] Group 4: Employment and Sector Performance - The PMI for large and small enterprises improved, with employment pressure easing slightly as the manufacturing, service, and construction employment indices changed by 0.6, 0.0, and -3.9 percentage points respectively[4] - The service sector PMI decreased by 0.4 percentage points to 50.1%, reflecting ongoing consumer pressure, particularly in retail and entertainment sectors[6] Group 5: Economic Outlook and Policy Implications - The report suggests a need for timely policy support as economic pressures continue to mount, particularly in consumption and real estate sectors[6] - Key upcoming events include the National Day and the Fourth Plenary Session in October, which may influence policy decisions[6] - The central bank may restart government bond purchases and is likely to cut interest rates in Q4, with fiscal measures expected to be implemented earlier than planned[6]

Core Viewpoint - UBS Chief Economist Paul Donovan indicates that the postponement of tariff increases by Trump to August 1 may delay the impact of these new tariffs on prices until 2026, rather than being felt fully before Christmas [1] Group 1: Tariff Impact on Consumers - The delay in tariff implementation means that consumers may not experience price increases during the holiday shopping season, which could alleviate some pressure on American consumers in the second half of the year [1] - Retailers typically stock up in advance for Christmas, and the entire supply chain process means that even if tariffs are implemented now, the actual price increases may be felt later [1] Group 2: Economic Implications - The postponement of tariffs could help the White House avoid negative news during the year-end shopping season, but it does not prevent the eventual transmission of these tariffs to American households [1] - Donovan warns that this delay represents a significant tax burden on American consumers, and by the end of the year, inflation-adjusted real wages are expected to decline rather than increase, which will reveal the true economic issues [1]