Monday Economic Report

S&P Global U.S. Manufacturing PMI: The S&P Global U.S. Manufacturing PMI was 55.1 in May, up from 54.5 in April, signaling stronger growth. Production rose at its fastest pace in over four years, accelerating from April. Supported by domestic demand, new orders continued to grow but at a softer pace than in April. At the same time, employment improved while optimism fell to its lowest level in four months.

The growth in production and new orders was driven by companies purchasing safety stock in anticipation of price increases and supply disruption. Furthermore, the conflict in the Middle East has led to further increases in input and output costs, with both rising at the fastest pace since 2022.

Additionally, supply disruptions persist as lead times deteriorated at their worst rate since August 2022. Meanwhile, stock of finished goods rose for the second consecutive month and at the quickest pace since November. Despite lowered optimism, firms anticipate higher sales and production going forward and have increased hiring plans.

Employment Report: Nonfarm payroll employment increased by 172,000 in May, coming in above expectations. Meanwhile, March’s job gain was revised upward by 29,000 to a gain of 214,000, while April’s job gain was revised upward by 64,000 to 179,000 jobs. The 12-month average stands at 42,000 job gains per month. Leisure and hospitality exhibited the most significant job gain, adding 70,000 in May. At the same time, the unemployment rate stayed the same from April at 4.3%, while the labor force participation rate was unchanged at 61.8% but is down from 62.4% in May 2025.

Manufacturing employment stepped up by 7,000 in May after staying the same in April. On the other hand, the collective job gains in March and April of 13,000 were revised upward by 2,000 jobs to an increase of 15,000 jobs. Manufacturing employment is down 46,000 over the year. Durable goods manufacturing employment rose by 17,000 in May, while nondurable goods employment fell by 10,000. The most significant gain in manufacturing in May occurred in fabricated metal product manufacturing, which added 6,700 jobs over the month. Meanwhile, the most significant loss occurred in plastics and rubber products manufacturing, which shed 6,100 jobs over the month.

The employment-population ratio edged up 0.1 percentage point from April to 59.2% in May but is down 0.5 percentage points from a year ago. Meanwhile, employed persons who are part-time workers for economic reasons fell by 137,000 from April to 4.8 million in May and are up from 4.6 million in May 2025. Native-born employment is up 294,000 from April but down 396,000 over the year. Meanwhile, foreign-born employment is down 176,000 in May and 107,000 over the year. At the same time, the native-born unemployment rate is up 0.1 percentage point over the year to 4.2% in May, while the foreign-born unemployment rate is down 0.2 percentage points to 3.5%.

Average hourly earnings for all private nonfarm employees rose 0.3%, or 12 cents, reaching $37.53. Over the past year, earnings have grown 3.4%. The average workweek for all employees stayed the same at 34.3 hours and was unchanged at 40.4 hours for manufacturing employees.

Factory Orders: New orders for manufactured goods increased 4.8% in April after moving up 1.8% in March. Meanwhile, new orders for manufactured goods rose 6.0% over the year. When excluding transportation, new orders stepped up 1.3% over the month and 4.6% year-over-year in April. Orders for durable goods jumped 8.0%, following a 1.3% uptick in March. Year to date, durable goods orders advanced 9.3%. Meanwhile, nondurable goods orders increased 1.4% after rising 2.3% in March. At the same time, nondurable goods orders grew 2.7% over the year.

In April, the largest monthly increase occurred in nondefense aircraft and parts, which surged 165.9% after declining 23.0% in March. The largest decline occurred in electromedical, measuring and control instruments, which fell 5.1% after rising 8.9% the prior month. The largest over-the-year changes occurred in industrial machinery (up 34.9%) and photographic equipment (down 13.3%).

Factory shipments rose 1.0% in April, after increasing 1.5% in March. Shipments grew 5.2% over the year. Shipments excluding transportation stepped up 1.0% in April, following a 1.7% uptick the previous month. Shipments for durable goods moved up 0.6% in April, following a 0.8% rise in March, and are up 7.7% year to date. Meanwhile, nondurable goods shipments increased 1.4%, after advancing 2.3% the prior month, and are up 2.7% year to date.

Unfilled orders for all manufacturing industries rose 1.7% in April, after ticking up 0.2% in March. Unfilled orders over the year jumped 11.5%. Inventories increased 0.3% month-over-month and 1.7% year-over-year. The inventories-to-shipments ratio edged down from 1.51 in March to 1.50 in April. The unfilled orders-to-shipments ratio for durable goods moved up from 6.88 in March to 6.95 in April.

J.P. Morgan Global Manufacturing PMI: In May, growth in global manufacturing activity was unchanged from April at 52.6. Output and new orders both improved as manufacturing production growth hit a near five-year high. Meanwhile, lead times remained elevated at the greatest level since August 2022. Employment rose slightly, and inventory levels continued to grow as firms prepare for anticipated supply chain disruptions and further cost increases.

Taiwan, the Netherlands, the U.S. and India had the highest PMI readings in May. On the other hand, Russia, Brazil and Mexico were some of the larger nations to register declines in activity. The acceleration growth in manufacturing production occurred across consumer, intermediate and investment goods.

Meanwhile, input and output price pressures continued to surge as the rate of growth for selling prices remained near a 45-month high. At the same time, business optimism dipped to a seven-month low amid rising cost pressures and supply chain disruptions. Geopolitical uncertainty continued to weigh on sentiment as input costs rose to the highest level in almost four years.

Job Openings and Labor Turnover Survey: Job openings for manufacturing rose by 24,000 to 474,000 in April. At the same time, the March job openings level of 450,000 was revised downward from 462,000 in the previous report. Nondurable goods openings in April stayed the same at 153,000, while durable goods job openings moved up 25,000 to 321,000. The manufacturing job openings rate ticked up to 3.6% from 3.4% in March and was up from 2.9% the previous year. The rate for nondurable goods manufacturing was unchanged at 3.1%, and the durable goods manufacturing rate increased 0.2 percentage points to 3.9%.

In the larger economy, the number of job openings advanced to 7.6 million, a gain of 731,000 from March and 520,000 higher than the previous year. The job openings rate stepped up to 4.6% from 4.2% in March and 4.3% in April 2025. This data reflects an overall labor market that has eased back to pre-pandemic levels but continues to remain relatively tight from a historical perspective.

The number of hires in the overall economy declined 419,000 to 5.1 million in April and 275,000 below the previous year. The hires rate for the overall economy moved down 0.3 percentage points in April to 3.2%. Meanwhile, the hires rate for manufacturing edged down to 2.3% from 2.4% in March and 2.5% in April 2025. The hires rate for durable goods was unchanged at 2.1%, while the hires rate for nondurable goods fell 0.6 percentage points to 2.4%.

In the larger economy, total separations, which include quits, layoffs, discharges and other separations, decreased 399,000 from March to 5.0 million and 292,000 from the previous year. The total separations rate declined 0.3 percentage points to 3.1% for the overall economy but stayed the same for manufacturing at 2.2%, though down from 2.5% the year prior. Within that rate, layoffs and discharges edged up 5,000 in April for manufacturing, while quits ticked down by 1,000. The quit and layoff rates continued to remain lower for manufacturing than the total nonfarm sector.