The United States manufacturing sector surged to its highest level in fours years, with manufacturing employment reaching a three-year high, primarily driven by robust order growth across multiple manufacturing industries.
| PULSE POINTS |
❓ WHAT HAPPENED: United States manufacturing reached a four-year high in July, according to a new report, with employment in the sector at a three-year high. 📺 DETAIL: According to data from the Institute for Supply Management, the world’s oldest and largest supply management association, manufacturing activity in the United States hit a four-year high last month. Specifically, the Manufacturing Purchasing Managers’ Index (PMI), a key indicator of the health of the manufacturing sector used by economic experts, reached 55.6 in July, an increase from 53.3 in June. This was the highest reading since May 2022. Notably, economists polled by Reuters predicted that the PMI would only rise to 54 in July. The increase in manufacturing activity was primarily driven by order growth and spanned 15 different industries, including appliances and components, computer and electronic products, electrical equipment, machinery, primary metals, and transportation equipment. Artificial Intelligence (AI) technology, in particular, experienced significant growth. This increase in manufacturing activity coincided with employment in the manufacturing sector reaching a three-year high. 🎯 IMPACT: The strong manufacturing data suggests continued economic resilience, despite concerns over inflation and the ongoing Iran war. This data also suggests that economists underestimated the U.S. manufacturing sector. The fact that the rise in manufacturing activity has been driven by order growth suggests there is an increase in demand for U.S.-made goods. This is likely a by-product of the Trump administration’s tariffs as well as reforms to the tax code. The rise in manufacturing employment reflects reports from last year, which revealed that major corporations intended to spend billions in investment to onshore production and create American jobs. The figures are likely to strengthen the Trump administration’s confidence in its economic agenda, which has placed the reshoring and restoration of American manufacturing at its heart. The rise in demand for U.S.-made goods also contextualizes the Federal Trade Commission’s crackdown on products falsely labeled as “Made in the USA.” |
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