Manufacturing Growth Moderates as Optimism Weakens

The S&P Global U.S. Manufacturing PMI was 53.9 in June, down from 55.1 in May, signaling weaker growth. Production rose in June, while supported by domestic demand, new orders continued to grow but at their softest pace since March. At the same time, employment fell, while optimism declined to its lowest level since October 2025.

The growth in production and new orders was driven by new product launches and pre-orders to protect against rising prices. Furthermore, the conflict in the Middle East continued to elevate input and output costs despite factory gate inflation softening to a three-month low.

Additionally, supply disruptions persisted as lead times remained elevated. At the same time, stock of finished goods rose at the strongest rate since May 2025. Concerns over the overall health of the domestic economy led optimism to fall to an eight-month low as firms pulled back on hiring.