Job cuts at U.S. factories in June approached levels not seen since the end of the global financial crisis in 2009 and the Covid-19 pandemic, according to a report from S&P Global released on Tuesday. The manufacturing index for June performed better than expected, primarily due to inventory rebuilding, despite significant job cuts that were the highest since 2009, excluding the initial labor reductions at the start of the Covid crisis in 2020.
Chris Williamson, chief business economist at S&P Global Market Intelligence, stated, "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."
Manufacturers have reported job cuts for three of the past four months as they aim to manage costs and address demand concerns. Williamson noted, "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, reflecting concerns over the sustainability of the recent upturn in demand alongside worries over the escalating cost of raw materials."
Despite the job cuts in manufacturing, the overall jobs market has shown strength this year, with gains in four of the five months. Manufacturing employment has increased by 23,000 in 2026, according to the Bureau of Labor Statistics.
The S&P manufacturing "flash" reading for its purchasing managers index (PMI) was reported at 55.7, slightly up from May and better than the Dow Jones consensus estimate of 54.8, indicating growth among companies. The services sector's flash PMI was at 51.3, also showing a slight increase and surpassing the consensus forecast of 51.
Companies have faced pressures this year due to a resurgence of inflation, particularly with rising energy prices. Federal Reserve officials are considering raising interest rates or delaying cuts until the situation in the Middle East stabilizes. Recent developments regarding a ceasefire and potential agreement with Iran have led to a decrease in oil prices, which Williamson noted has helped "restore some confidence" among businesses.
However, economic growth has been slow, with an annualized pace of just 1.6% in the first quarter and 0.5% in the fourth quarter of 2025. Williamson commented that the survey indicates current output levels are consistent with an economy struggling to grow much faster than a 1% annualized rate in the second quarter. Federal Reserve Chairman Kevin Warsh characterized economic growth as "solid" but acknowledged "elevated uncertainty" partly due to conflicts in the Middle East.