By Andrew Miller
The headline out of U.S. manufacturing yesterday looks encouraging.
The S&P Global Flash Manufacturing PMI came in at 55.7 for June, a 49-month high. That’s better than the consensus forecast and the strongest reading since May 2022.
The jobs picture has been positive overall this year, with strong gains in four of the five months. Over 23,000 new manufacturing jobs have been added in 2026.
Looking beyond that headline number shows a different picture. Job cuts at American factories are the highest since the 2008-2009 financial crisis, outside of the pandemic.
Manufacturers are worried about global demand and rising costs of raw materials. In addition, supply delays have become more widespread this month. So, they’ve cut headcount for the second straight month, and for the third time in the past four months.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, put it plainly in Tuesday’s release: “Most worrying was the further fall in employment, notably in the manufacturing sector. Factory job cuts are running at the highest since 2009 if the pandemic is excluded.”
So why does the headline number look so good?
According to S&P Global, the latest gains were driven largely by companies stockpiling inventory ahead of expected supply disruptions and cost increases tied to the ongoing Middle East conflict.
Factories are producing more. They just don’t trust that the demand behind it is real. And when businesses don’t trust demand, they don’t hire. There’s a disconnect between the index numbers and what’s happening on the factory floor.
A PMI above 50 means expansion. It doesn’t tell you whether that expansion is built on real consumer demand or a precautionary stockpile. It doesn’t tell you that the workers who built last quarter’s output aren’t coming back for this one.
The takeaway isn’t doom. It’s that headline numbers are summaries, and summaries leave things out. Right now, they’re leaving out the workers.
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