Factory job cuts in June hit their highest levels since the 2009 financial crisis, according to an S&P Global report released this week, signaling growing employer concerns over demand sustainability and rising raw material costs even as the manufacturing sector’s overall output expanded.
The S&P Global Flash US Manufacturing PMI rose to 55.7 in June, up from 55.1 in May and marking its highest reading in 49 months. However, the employment component of the index told a starkly different story. Manufacturing headcounts were cut at the fastest rate since the COVID-19 lockdowns of early 2020, with job cuts running at their highest levels since 2009 when the pandemic is excluded, according to the official S&P Global report.
Chris Williamson, chief business economist at S&P Global Market Intelligence, described the employment decline as the most worrying aspect of the data. “Most worrying was the further fall in employment, notably in the manufacturing sector,” Williamson said. “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.”
The disconnect between output growth and employment cuts reveals a bifurcated economy. While manufacturing output grew at its fastest rate since July 2021, driven partly by precautionary inventory building amid supply chain disruptions, manufacturers remained cautious about their workforce. Employees were cut for the third time in the past four months, according to the S&P Global survey data collected June 11-22.
The job cuts contrast with broader labor market strength earlier in 2026. Manufacturing employment had risen by 23,000 through May, according to the Bureau of Labor Statistics, suggesting the June deterioration marks a sharp reversal. The cuts appear driven by manufacturers’ focus on cost reduction in response to elevated input prices and uncertainty over the economic outlook, particularly regarding the impact of Middle East conflicts and tariff policies.
Input price inflation remained elevated despite cooling slightly in June. Supply chain delays also grew more widespread, with supplier delivery times lengthening to their greatest extent since August 2022, commonly linked to shipping disruptions and tariff impacts. These pressures have forced manufacturers to shed workers even as they maintain production to meet demand.
Sources
- S&P Global — Official Flash US PMI report for June 2026, including manufacturing PMI reading of 55.7, employment data, and Chris Williamson commentary
- CNBC — Factory job cuts report with context on manufacturing employment gains through May and broader economic conditions
- Reuters — Manufacturing employment tumble to six-year low confirmation
