U.S. manufacturing employment contracts at fastest pace since pandemic, S&P Global survey shows

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US manufacturing jobs contract

Highlights

S&P Global’s U.S. Flash PMI employment gauge falls to 47 in June from 51.6 in May, marking the fastest manufacturing job contraction since May 2020.
Official data show U.S. factory employment declined by 77,000 jobs since President Trump’s second term began, while manufacturing construction spending dropped 16% to $15.2 billion in April from January 2025.
Despite nearly $1 trillion in announced manufacturing investments since 2025, employment gains remain limited outside AI, defense, and tariff-protected sectors due to policy volatility and input cost pressures.

June survey points to sharper factory job cuts

S&P Global’s U.S. Flash Purchasing Managers’ Index indicates manufacturing employment is falling in June at the fastest monthly rate since May 2020, when pandemic lockdowns were disrupting large parts of industrial activity. The survey’s employment gauge drops to 47 in June from 51.6 in May, with readings below 50 signaling contraction.

Chris Williamson, chief business economist at S&P Global Market Intelligence, says the survey signals output levels consistent with the economy struggling to grow much faster than a 1% annualized rate in the second quarter. He says manufacturing output is still expanding, but that growth is partly driven by fears over future supply disruptions and price increases associated with the Iran conflict.

Williamson says factory job cuts are running at their highest level since 2009 when the pandemic period is excluded, reflecting concerns about whether the recent improvement in demand can last and about escalating raw material costs. He also says around a fifth of executives report difficulty finding workers willing or able to work in factories, while input cost inflation shows signs of cooling in June partly because of lower energy prices near the end of the survey period.

Policy pressure weighs on broader manufacturing outlook

President Donald Trump has pledged a “golden age” for U.S. manufacturing and has highlighted investment announcements totaling almost $1 trillion since his 2025 inauguration. But outside fast-growing areas tied to AI data center construction, defense spending and tariff-supported sectors such as steel, many manufacturers are still dealing with higher input costs and frequent policy shifts.

Official data show U.S. factory employment has fallen by 77,000 jobs since Trump’s second term begins, while private spending on manufacturing construction falls to $15.2 billion in April, about 16% below January 2025. On Monday, Democratic Senators Elizabeth Warren and Mark Kelly write to senior administration officials seeking an explanation for the widening trade deficit in manufactured goods.

In their letter, the senators say blue-collar jobs are disappearing and cite economists who blame the trend at least in part on the president’s historic and volatile tariff policy. The figures add to signs that the sector’s headline investment momentum is not translating evenly into broader factory employment growth.

In our earlier article on S&P Global’s June flash U.S. manufacturing PMI, we noted that headline factory activity strengthened, helped in part by inventory rebuilding and firms bringing forward orders amid worries about supply disruptions and higher input costs. However, the same survey pointed to some of the sharpest manufacturing job cuts in years, with hiring plans constrained by demand uncertainty and still-elevated cost pressures—signals consistent with roughly 1% annualized growth in Q2.

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