US manufacturing activity rose in June, factory hiring fell to six-year low | Ukraine news
Stronger orders mask mounting cost pressures and job cuts in factories, raising questions about whether production gains can sustain without easing input inflation.
Washington, June 23 – activity in the U.S. manufacturing sector rose again in June: companies front-loaded new orders in response to anticipated shortages and rising prices, but factory employment fell to a six-year low due to rising operating costs tied to the conflict in the Middle East.
According to S&P Global, the preliminary Manufacturing PMI rose to 55.7 this month – the highest since May 2022, while May stood at 55.1. A reading above 50 indicates expanding production, which accounts for about 9.4% of the economy. Economists surveyed by analysts expected the manufacturing PMI to slip to 54.8.
Growth in manufacturing was accompanied by an uptick in the services PMI to 51.3 from 50.7 in May, lifting the U.S. composite PMI according to S&P Global to 52.2 from 51.5 last month. The rise in the services PMI is partly linked to the FIFA World Cup, hosted by the United States, Canada and Mexico.
The manufacturing PMI index has risen for the fourth month in a row, partly due to companies replenishing inventories in case of shortages and rising prices.
The war between the United States, Israel and Iran, which has been ongoing for four months, is weighing on global supply chains and boosting prices for oil-related goods, as well as for aluminum and fertilizers.
Last week the United States and Iran signed an interim agreement aimed at ending the war. On Monday, Vice President JD Vance said that talks with Iranian officials in Switzerland laid a “good foundation” for a final peace agreement, despite tensions over the Hormuz Strait and Lebanon.
Layoffs in manufacturing have reached their highest level since 2009, excluding the pandemic, underscoring concerns about the durability of the recent demand growth amid rising input costs.
– Chris Williamson
Private-Sector Employment Remains Low
Overall private-sector employment remained subdued for the second month in a row. This contrasts with the Labor Department data showing private payroll growth rebounding over the last three months. For the three months ended May, private nonfarm payrolls averaged 166,000 jobs per month, versus only 62,000 in the same period in 2025. Analysts surveyed note that private surveys do not always accurately forecast official employment data.
The manufacturing new orders index, according to S&P Global, rose to a more than four-year high for the month. The rise was attributed to demand being temporarily supported by warnings of potential supply disruptions and higher prices due to the war. Meanwhile the inventories index reached its highest level in 13 months.
Additionally, supplier lead times lengthened to levels last seen in August 2022. Before the war, suppliers had been constrained by broad tariffs imposed by the Trump administration. While a drop in oil prices from multi-year highs at the outset of the conflict restrained further increases in input costs, inflation at factory sites remained high.
The Prices paid by factories for inputs fell to 71.2 from 75.3 in May. Manufacturers continued to pass costs on to consumers, though the pace of price declines slowed. The Prices received by manufacturers for goods produced fell to 61.0 from 63.1 in May. The decline was partially offset by gains in the services sector, and the overall index of prices received by the private sector stayed at 58.6. The overall input prices index fell to 62.1 from 62.5 in May.
Elevated readings reflect economists’ expectations of sustained high inflation and the likelihood of the Federal Reserve raising interest rates within the year amid rising inflation risks.
Current data indicate the industrial sector is behaving flexibly: demand and inventory management support output, but weaker employment in manufacturing and rising costs remain key concerns for the U.S. economy.
In summary, shifts in demand and supply are shaping today’s production dynamics: on one hand, recovery and inventories; on the other, higher costs and weak employment, underscoring the need for steady anti-inflationary policy and careful monitoring of the labor market in the coming months.
