The Institute for Supply Management® (ISM®) reported that the Manufacturing PMI® for May 2025 declined slightly to 48.5%, compared to 48.7% in April.
This marks another month of contraction in U.S. manufacturing, although the broader economy continued to expand for the 61st consecutive month. A reading above 42.3% typically signals overall economic growth, suggesting that the current decline remains confined largely to the manufacturing sector.
Susan Spence noted that while demand remains weak, there are early signs of stabilization, especially in new orders and backlogs. However, export demand declined further, and customer inventories are still too low, which could encourage higher production in the near term.
Production continues to contract, but the decline has moderated compared to April. Employment remains soft, with layoffs persisting as companies avoid natural attrition. Inputs including inventories and imports softened further amid trade disruptions and post-tariff adjustments. Prices remain elevated, although the pace of increases has moderated.
Industries Reporting Expansion (7 total):
Industries Reporting Contraction (7 total):
The May 2025 ISM report reflects a broad but mixed picture for the U.S. manufacturing sector. While contraction persists, the pace has moderated in some areas, hinting that the worst of the downturn may be easing. Persistent challenges remain, particularly on the input side and in global trade, but modest improvements in orders and sector breadth offer some cautious optimism.
Source: ISM
The US private sector shed 33,000 jobs in June, according to the latest ADP National Employment Report compiled with Stanford’s Digital Economy Lab. The data highlights a notable slowdown in hiring despite continued resilience in wage growth.
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