US manufacturing job cuts hit crisis levels despite index beat
While the S&P Global manufacturing index outperformed market expectations, the improvement was driven by inventory restocking rather than underlying strength, as job cuts neared levels seen during the 2008 financial crisis and the pandemic.
S&P Global reported that manufacturing job cuts in the United States during June reached levels comparable to those observed during the 2008 financial crisis and the COVID-19 pandemic. The data highlights a significant divergence in the sector, where headline index figures masked the severity of employment reductions across factory floors.
Although the S&P Global manufacturing index performed better than expected for the month, the firm attributed this positive reading primarily to an inventory rebuild. This restocking activity provided a temporary lift to the index, obscuring the broader weakness in the labour market within the manufacturing sector.
The report underscores a disconnect between inventory metrics and employment trends. While businesses accumulated stock, they simultaneously reduced their workforce at a pace that historically signals deep economic stress, echoing the contraction seen during previous major global disruptions.
This sector-specific deterioration occurred against a backdrop of broader equity market gains. US stock markets rose on Thursday, with the Dow Jones Industrial Average gaining 0.8%, the S&P 500 rising 0.3%, and the Nasdaq Composite climbing 0.2%. These gains coincided with the commencement of a two-day summit between President Donald Trump and President Xi Jinping in Beijing.
The positive market movement was further supported by the debut of SpaceX on the Nasdaq on 11 June 2026. The company raised $75 billion in a record-breaking initial public offering, valuing the firm at approximately $1.77 trillion. Despite these high-profile market events, the underlying manufacturing data points to persistent structural challenges within the industrial sector.
