Story perspectives

US Manufacturing Rebounds to Two-Year High Amid Job Losses

6/2/2026

Summary

US Manufacturing Surges

U.S. manufacturing activity rose to a 54.0 PMI in May 2026, highest since May 2022, as AI spending and firms front-loaded orders ahead of price hikes from the Iran-related Strait of Hormuz closure.
The New Orders Index climbed to 56.8 in May, while the Supplier Deliveries Index held steady at 60.6.
The Manufacturing Employment Index marked its 32nd straight month of contraction, with about 77,000 jobs lost since January 2025.

Summary

US Manufacturing Costs

Raw material price spikes for fuel and oil products pushed the input-cost inflation index to its highest level since July 2022.
Supplier delivery times fell to their worst since August 2022 while manufacturers raised input inventories for a second month despite ongoing sourcing and shipment delays.
Four of the six largest sectors recorded order growth while half of the 18 industries reported rising employment despite the employment index staying at 48.6%.

History

Historical Context

The 1973 OAPEC oil embargo, launched after the Yom Kippur War, drove world oil prices up nearly 300%—from $3 to $11.65 per barrel—shocking U.S. industry and prompting energy-security policies. That lesson shapes today’s Treasury and DOE plan to harden supply chains as AI-driven factories face a May 2026 fuel surge from a Strait of Hormuz closure.

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US Manufacturing Surges

U.S. manufacturing activity rose to a 54.0 PMI in May 2026, highest since May 2022, as AI spending and firms front-loaded orders ahead of price hikes from the Iran-related Strait of Hormuz closure.
The New Orders Index climbed to 56.8 in May, while the Supplier Deliveries Index held steady at 60.6.
The Manufacturing Employment Index marked its 32nd straight month of contraction, with about 77,000 jobs lost since January 2025.

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