Manufacturing employment losses at American factories climbed to their highest levels since the 2009 end of the global financial crisis, excluding the pandemic, S&P Global reported Tuesday.
The alarming job cut figures emerged even as S&P Global’s broader manufacturing flash purchasing managers index came in stronger than expected for June, registering 55.7.
That reading edged narrowly higher from May and beat the Dow Jones consensus estimate of 54.8, offering some superficial relief to markets watching the sector closely.
However, analysts cautioned that the headline figure masked serious underlying weaknesses, with growth largely driven by an inventory rebuild rather than genuine demand strength.
“While there is better news from the manufacturing sector, we remain concerned as factory growth continues to be temporarily buoyed by inventory building amid supply fears,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Williamson added that supply delays grew more widespread in June, compounding concerns about the durability of any recovery in the manufacturing sector.
Manufacturers have indicated job cuts in three of the past four months, as companies seek to reduce headcount in response to cost pressures and uncertain demand conditions.
“Factory job cuts are running at the highest since 2009 if the pandemic is excluded, reflecting concerns over the sustainability of the recent upturn in demand alongside worries over the escalating cost of raw materials,” Williamson said.
Despite the factory sector’s struggles, the broader jobs picture has remained relatively solid in 2026, with manufacturing employment rising by 23,000 through the year according to the Bureau of Labor Statistics.
On the services side, the flash PMI registered 51.3 for June, also slightly higher on the month and marginally ahead of the consensus forecast of 51.
Businesses have faced mounting pressure from an inflation resurgence this year, with energy prices soaring and Federal Reserve officials contemplating interest rate rises rather than cuts.
Recent ceasefire headlines and a possible lasting agreement with Iran have triggered a slip in oil prices, which Williamson said has helped “restore some confidence” among businesses navigating volatile conditions.
Growth signals remain fragile, however, for an economy that expanded at just a 1.6% annualised pace in the first quarter and a meagre 0.5% rate in the fourth quarter of 2025.
“The survey signals that current output levels are consistent with the economy struggling to grow much faster than a 1% annualized rate in the second quarter,” Williamson said, striking a cautious tone on near-term prospects.
Federal Reserve Chairman Kevin Warsh last week described economic growth as “solid” and attributed “elevated uncertainty” in part to ongoing Middle East conflicts affecting global trade and energy markets.