Could’ve been worse.

That, in a nutshell, was the takeaway from Monday’s update on the marquee gauge of US manufacturing activity.

I doubt most readers need the backstory, but just in case: US manufacturing’s mired in a two-year (and counting) quagmire, at odds with the Biden administration’s political messaging which in places touted a renaissance on the factory floor.

ISM’s gauge spent 24 of the last 25 months below the 50 demarcation line that separates expansion from contraction. November was no different in that regard, but at 48.4, the headline topped estimates. Consensus expected 47.5.

The reading for last month was the best since June. The final read on S&P Global’s US factory gauge for last month, also released on Monday, was 49.7, up meaningfully from the flash print and likewise the best in five months.

“The mood among US manufacturers brightened in November [when] optimism about the year ahead improved to a level not beaten in two-and-a-half years, buoyed by the lifting of uncertainty seen in the lead up to the election, as well as the prospect of stronger economic growth and greater protectionism against foreign competition under the new Trump administration in 2025,” S&P Global’s Chris Williamson said. (Yay! Protectionism.)

Notably, the ISM new orders gauge moved back into expansion territory. 50.4 was the first print north of 50 in seven months. The employment index jumped nearly four points to 48, still indicative of contracting payrolls but at a much slower pace.

In another encouraging development, the prices gauge slipped four points in November. It rose in October to the chagrin of a Fed that needs a re-acceleration of goods inflation about like it needs across-the-board tariffs.

Do note: Economists expected the prices gauge to rise in November, to 56. So 50.3 counted as a pronounced downside surprise.

Of course, tariffs are the wildcard. “The promise of protectionism has meanwhile led to an increase in input buying by some US producers, as they seek to front-run price hikes on imports from threatened tariffs,” S&P Global’s Williamson said, adding that “one in four companies reporting higher input purchases in November attributed the rise to tariff threats, underlying US manufacturers’ concerns over the inflationary impact of tariffs.”

I guess no one told those manufacturers that China pays for tariffs via sweepstakes-sized checks made payable to the US Treasury.