Manufacturing Rebounds in S&P Data

U.S. manufacturing sent conflicting signals in June 2025, as separate surveys painted diverging pictures of sector performance.

The S&P Global Manufacturing PMI surged to 52.9, marking the strongest level since early 2022. This sharp improvement reflected:

• Broad-based growth in output, new orders, and export demand
• A solid rise in employment
• Increased business confidence despite rising input costs and tariff-related pressures

In contrast, the ISM Manufacturing PMI remained in contraction territory, posting 49, though this was an improvement from May. While production and inventories rebounded, key indicators like new orders, employment, and order backlogs continued to deteriorate, showing persistent softness in factory demand and hiring.

Inflation Pressures Build Slightly

Across both reports, inflationary pressures crept higher, largely due to rising input prices driven by tariffs and currency movements. Firms reported passing on some of these costs to maintain margins.

Labor Market Shows Strength

In a more encouraging development, U.S. job openings rose sharply in May, climbing by 374,000 to 7.77 million. The rebound was led by the services sector and concentrated in the Southern region, reflecting resilient labor demand even with broader economic uncertainty.

Overall, while PMI results show a sector in transition, with S&P signaling recovery and ISM flashing caution, the strong labor market offers a counterbalance, suggesting that domestic demand remains supportive despite global conflicts.