Factory Job Cuts Hit Six-Year Low as Manufacturing PMI Rises

June 2026 saw the S&P Global flash manufacturing PMI climb to 55.7, its highest since May 2022 and above the 54.8 consensus, marking four months of order-driven growth. Simultaneously, the survey’s factory-employment gauge dropped to 47.0, the lowest since May 2020, reflecting job cuts the most severe since 2009, excluding the pandemic wave.

Reuters

The job-cut pace exceeds the post-2009 trough and the 2020 pandemic spike. Higher operating costs stem from the U.S.–Israeli war with Iran, now in its fourth month, which has lifted crude-oil, aluminum and fertilizer prices. An interim peace agreement was signed last week, easing some supply-chain pressure. The FIFA World Cup also nudged the services PMI to 51.3.

Reuters

June’s manufacturing PMI rose to 55.7 and services PMI to 51.3, lifting the composite PMI to 52.2. The factory-employment gauge fell to 47.0, its lowest since May 2020. New orders hit a four-year high. Payrolls grew by 166,000 jobs in Q1 2026, versus 62,000 a year earlier.

Reuters

Chris Williamson of S&P Global warned that factory growth is buoyed by inventory building amid supply fears. Federal Reserve Chairman Kevin Warsh called the economy “solid” but noted “elevated uncertainty” from Middle-East tensions. Vice President JD Vance said talks with Iranian officials in Switzerland have laid a “good foundation” for a final peace deal.

CNBC

Analysts warned that demand-driven inventory buildup is unsustainable and that rising raw-material costs could trigger further layoffs. Reliance on short-term order acceleration, described as a “temporary support” for output, raises doubts about the rebound’s durability.

CNBC

S&P’s employment gauge shows a six-year low, while Labor Department data report private payrolls adding 166,000 jobs per month in Q1 2026. Private surveys have historically mis-predicted official payrolls, leaving the true extent of factory-sector job loss uncertain.

Reuters

• “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. Supply delays grew more widespread in June,” — Chris Williamson, chief business economist, S&P Global Market Intelligence

CNBC

• “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.” — Chris Williamson, chief business economist, S&P Global Market Intelligence

CNBC

• “solid” — Kevin Warsh, Federal Reserve Chairman

CNBC

• “good foundation” — JD Vance, Vice President of the United States

Reuters

The Federal Reserve is expected to consider further rate hikes later in 2026 as input-price pressures persist. Ongoing diplomatic efforts aim to finalize a comprehensive peace agreement with Iran, which could stabilize commodity markets. Subsequent PMI releases will reveal whether inventory-driven growth can be sustained without additional employment erosion.

Reuters