In June, job cuts at U.S. manufacturing facilities neared their highest levels since the global financial crisis ended in 2009, S&P Global reported Tuesday.
The surge in layoffs also rivaled reductions seen during the Covid-19 pandemic, raising fresh concerns about the durability of any industrial recovery.
S&P Global’s manufacturing “flash” purchasing managers index came in at 55.7 for June, up narrowly from May and ahead of the Dow Jones consensus estimate of 54.8.
Despite the headline beat, analysts cautioned that the index’s strength was driven largely by an inventory rebuild rather than genuine demand growth across the sector.
“While there is better news from the manufacturing sector, we remain concerned as factory growth continues to be temporarily buoyed by inventory building amid supply fears,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Williamson added that supply delays grew more widespread throughout June, compounding worries about cost pressures already weighing on factory operators nationwide.
“Most worrying was the further fall in employment, notably in the manufacturing sector,” Williamson said. “Factory job cuts are running at the highest since 2009 if the pandemic is excluded, reflecting concerns over the sustainability of the recent upturn in demand alongside worries over the escalating cost of raw materials.”
Manufacturers have indicated job cuts in three of the past four months as firms work to reduce headcount in response to cost and demand concerns.
Despite factory-level weakness, broader U.S. employment has remained largely solid this year, with manufacturing employment rising by 23,000 in 2026 according to the Bureau of Labor Statistics.
On the services side, the flash PMI registered 51.3 for June, slightly above the prior month and marginally better than the consensus forecast of 51.0.
Businesses have faced mounting pressure from an inflation resurgence this year that sent energy prices soaring and prompted Federal Reserve officials to contemplate raising interest rates rather than cutting them.
Recent headlines about a potential ceasefire and lasting agreement with Iran have triggered a slip in oil prices, which Williamson said helped “restore some confidence” among business operators.
Still, growth signals remain tepid for an economy that expanded at just a 1.6% annualized pace in the first quarter and a meager 0.5% rate in the fourth quarter of 2025.
“The survey signals that current output levels are consistent with the economy struggling to grow much faster than a 1% annualized rate in the second quarter,” Williamson said.
Federal Reserve Chairman Kevin Warsh last week characterized economic growth as “solid” and attributed “elevated uncertainty” in part to ongoing Middle East conflicts affecting energy markets.
