The US manufacturing sector took a step back in June, with the Institute for Supply Management’s Purchasing Managers’ Index falling to 53.3 from 54.0 in May. That May reading had been the strongest since May 2022, so the retreat is less a crisis and more a natural exhale after a sustained sprint.
Any number above 50 signals expansion, so the sector is still growing. It’s just growing a bit less aggressively than it was a month ago.
The numbers worth paying attention to
The headline PMI decline gets the top billing, but the real story in June’s report is the Prices Index, which fell to 73.0 from 82.1 in May. That is a sharp move down in a single month, and it matters because elevated input costs have been one of the stickier inflation problems facing manufacturers this year.
New Orders held up better than expected, slipping only to 56.0 from 56.8. A reading of 56.0 still points to healthy demand ahead.
