US manufacturing soars in June on pre-empt orders
Live Events PRIVATE SECTOR EMPLOYMENT SUBDUED as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now
Live Events PRIVATE SECTOR EMPLOYMENT SUBDUED as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Washington: U.S. manufacturing activity rose again in June as companies preemptively placed new orders in anticipation of shortages and higher prices, but factory employment hit a si year low, blamed on rising operating costs related to the Middle East conflict.S&P Global said its flash manufacturing PMI increased to 55.7 this month, the highest reading since May 2022, from 55.1 in May. A reading above 50 indicates growth in manufacturing, which accounts for 9.4% of the economy. Economists polled by Reuters had forecast the manufacturing PMI slipping to 54.8.The rise combined with an increase in the flash services PMI to 51.3 from 50.7 in May to lift the S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, to 52.2 from 51.5 last month. The increase in the services PMI was partly attributed to the FIFA World Cup tournament, jointly being hosted by the U.S., Canada and Mexico.The manufacturing PMI has increased for four straight months, in part driven by businesses seeking to restock to avoid shortages and rising prices.The U.S.-Israeli war with Iran, now in its fourth month, is straining global supply chains and driving up prices of commodities tied to crude oil as well as aluminum and fertilizers.
The U.S. and Iran last week signed an interim agreement to end the war. On Monday, Vice President JD Vance said talks with Iranian officials in Switzerland had laid a "good foundation" for a final peace deal, despite tensions over the Strait of Hormuz and Lebanon.Though the hopes for peace helped to restore some confidence among businesses, they were not enough to overcome inflation concerns, with manufacturers dominating job cuts. S&P Global attributed the layoffs to "concerns over the outlook and in response to rising overheads, notably in terms of raw material prices." The survey's measure of manufacturing employment dropped to 47.0, the lowest reading since May 2020, from 51.6 in May."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," said Chris Williamson, chief business economist at S&P Global Market Intelligence.Overall private sector employment was subdued for a second straight month. That is in stark contrast with Labor Department data showing private payrolls growth regaining momentum in the last three months.
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