US manufacturing shrinks for fourth month in June
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The news: US manufacturing activity contracted for a fourth consecutive month in June, as new orders and employment slowed on the back of Trump’s trade tariffs.
The numbers: Data from the Institute for Supply Management (ISM) said that US manufacturing PMI edged up to 49.0 in June from a six-month low of 48.5 in May. Readings below 50 indicate contraction in the sector which accounts for 10.2% of the US economy.
New orders contracted for the fifth month in a row following a three-month period of expansion, 46.4% for June - 1.2 percentage points lower than the 47.6% recorded in May.
The context: The Trump administration’s trade tariffs continue to inflict uncertainty on the US economy, with businesses unable to plan ahead.
With manufacturers facing weak demand and higher prices, the survey’s employment index declined further in June, with manufacturing employment falling to 45.0 from 46.8 in May. The ISM has noted an "acceleration of headcount reductions due to uncertain near- to mid-term demand."
US government figures released last week show that consumer spending declined in May by the most in 2025, following on from the weakest quarter for personal consumption since the Covid-19 pandemic.
