A pedestrian walks past a wanted sign posted at a gas station on June 5, 2026 in Los Angeles, California.
Justin Sullivan | Getty Images
U.S. factory layoffs are near the highest level since the end of the 2009 global financial crisis and the coronavirus pandemic, S&P Global reported Tuesday, amid growing concerns about rising global demand and costs.
The company’s June manufacturing index beat expectations, mainly due to inventory rebuilding and despite significant job cuts, the biggest since 2009, excluding large-scale layoffs at the start of the coronavirus crisis in 2020.
“Despite some good news from the manufacturing sector, concerns remain as factory growth continues to be temporarily supported by inventory buildup amid supply concerns,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. “Supply delays widened further in June.”
Manufacturers are looking to cut jobs due to cost and demand concerns, and have indicated they will do so in three of the past four months.
“The biggest concern was the further decline in employment, particularly in manufacturing,” Williamson said. “Excluding the pandemic, factory layoffs are at their highest level since 2009 and reflect concerns about the sustainability of the recent upturn in demand, alongside concerns about soaring raw material prices.”
Despite concerns about manufacturing layoffs, the employment situation has remained generally strong this year, with significant increases in four out of five months. Manufacturing employment increased by 23,000 in 2026, according to the Bureau of Labor Statistics.
The S&P Manufacturing Purchasing Managers Index came in at 55.7, up slightly from May and beating the Dow Jones consensus estimate of 54.8. This measure represents the percentage of companies that reported growth for the month.
On the services side, the preliminary PMI was 51.3, also up slightly from last month and slightly above the consensus estimate of 51.
Businesses have been under pressure this year from a resurgence in inflation accompanied by soaring energy prices, and the Federal Reserve is considering raising interest rates, or at least avoiding cuts, until the situation in the Middle East calms down. Mr Williamson said recent headlines about a possible cease-fire and permanent deal with Iran had caused oil prices to drop, which led to a “restoration of confidence” among businesses.
But signs of growth are muted for an economy that accelerated at an annual rate of just 1.6% in the first quarter of 2025 and just 0.5% in the fourth quarter of 2025.
“The survey shows that current output levels are consistent with the economy struggling to grow well above the 1% annualized rate in the second quarter,” Williamson said.
But Federal Reserve Chairman Kevin Warsh last week characterized economic growth as “solid” and said the Middle East conflict was a contributing factor to the “increased uncertainty.”
