economy
Factory job cuts in June neared financial crisis and Covid levels, S&P says
Though the firm's manufacturing index ran better than expected for June, it came largely from an inventory rebuild and despite sharp job cuts.
TL;DR
- U.S. factory job cuts in June were near their highest levels since 2009, excluding the initial Covid-19 crisis.
- Companies are reducing staff due to concerns over global demand and rising costs, particularly for raw materials.
- The S&P manufacturing index improved slightly in June, driven by inventory rebuilding rather than organic growth.
- Supply delays became more widespread in June, contributing to manufacturing challenges.
- Despite manufacturing layoffs, the overall U.S. jobs picture has been relatively solid for the year.
- The S&P manufacturing PMI was 55.7 for June, exceeding expectations, while the services PMI was 51.3.
- Companies are feeling pressure from inflation and the possibility of the Federal Reserve delaying interest rate cuts.
- Economic growth remains tepid, with current output suggesting an annualized rate around 1% for the second quarter.