USA MONITOR
June slows its pace, but employment sends the first recovery signal
After May's strengthening, the US economy remains in expansion but loses momentum. Manufacturing grows for the sixth consecutive month, services remain above the 50 threshold for the twenty-fourth month, but both indices retreat. The new development comes from employment: in services, hiring returns to expansionary territory, while in manufacturing it approaches the 50-point threshold. It is not yet a full normalisation, but compared with the two previous readings the quality of the data has changed.
In brief
| Indicator | Manufacturing | Services | Operational reading |
|---|---|---|---|
| PMI | 53.3 from 54.0 | 54.0 from 54.5 | Expansion confirmed, but at a slower pace. |
| New orders | 56.0 from 56.8 | 55.1 from 57.3 | Demand still positive, but less robust than in May. |
| Employment | 49.7 from 48.6 | 51.2 from 47.9 | Best signal of the month: services back in expansion, manufacturing nearly at the threshold. |
| Prices | 73.0 from 82.1 | 67.7 from 71.3 | Cost pressures declining, but not yet normalised. |
1. The headline figure remains positive, but loses momentum
June does not interrupt the expansionary phase. Manufacturing remains above the 50 threshold for the sixth consecutive month, with a PMI of 53.3. Services hold at 54.0, marking the twenty-fourth month in positive territory. Compared with May, the tone of the reading shifts: the economy remains in expansion, but has shed some of the momentum built up in the previous month.
In manufacturing, fourteen industries are growing while three are contracting. In services, the number of expanding industries falls from seventeen to fourteen, and those contracting rises to four. The headline figure therefore remains positive, but the breadth of growth is narrower than in the prior month.
2. The sectoral map: where growth remains most compelling
In manufacturing, the most solid areas remain those in which growth, orders and employment move in the same direction: Printing & Related Support Activities, Electrical Equipment, Primary Metals, Machinery, Transportation Equipment, Plastics & Rubber Products and Chemical Products. Computer & Electronic Products warrants monitoring: demand and activity are positive, but a full confirmation on employment is still lacking. Paper Products, Furniture & Related Products and Wood Products are weak.
In services the picture is less broad than in May, but more interesting on the employment front. Wholesale Trade, Transportation & Warehousing, Finance & Insurance, Accommodation & Food Services and Professional Services display the most balanced combination of growth, orders and employment. Real Estate returns to expansion: a signal to watch, but not yet confirmation. Agriculture, Educational Services, Management of Companies and Public Administration remain fragile.
3. New Orders: demand still expanding, but losing momentum
The second tier of the Monitor remains positive. In manufacturing, new orders ease from 56.8 to 56.0, yet hold at a solid, expansionary level for the sixth consecutive month. In services, the New Orders Index moves from 57.3 to 55.1: the slowdown is more visible, but demand remains above the 50-point threshold for the thirteenth consecutive month.
Demand, therefore, has not stalled. It is simply proceeding with less intensity following May's rebound. In manufacturing, new orders remain positive across eleven industries; in services, across twelve. The signal stays constructive, but growth appears less broad-based and more selective than in the prior month.
4. Employment: the new signal comes from services
The employment reading is the most noteworthy development of the month. In manufacturing, the Employment Index rises from 48.6 to 49.7. The 50-point threshold has not yet been breached, so the sector remains technically in contraction. The movement is nonetheless significant, as it brings the index to the edge of expansionary territory. The underlying weakness remains evident: manufacturing employment has been in contraction for thirty-three consecutive months. That said, relative to prior months, June reveals an industrial labour market that is less fragile.
The more meaningful shift, however, comes from services. The Employment Index climbs from 47.9 to 51.2, returning to expansion for the first time in three months. Nine industries report an increase in headcount, collectively accounting for more than 58% of US GDP. This is the first signal, following two consecutive readings dominated by the divergence between output growth and employment, that firms are once again supporting activity through their payrolls.
5. Prices and the Fed: less pressure, but not yet normalisation
Prices also improve. In manufacturing, the Prices Index falls from 82.1 to 73.0. The decline is sharp, yet the level remains elevated and raw-material prices have risen for the twenty-first consecutive month. In services, the Prices Index eases from 71.3 to 67.7, the first reading below 70 since February.
The cooling is real, but not conclusive. Energy, fuels, petroleum products, metals, transportation, components, and tariffs continue to feature in respondents' comments. In services, diesel, petrol, and fuels appear both among items rising in cost and among those declining, reflecting divergent conditions across contracts and sectors.
For the Federal Reserve, the June report is easier to interpret than May's, though not sufficiently so to alter the outlook on its own. The return of services employment above 50 and the easing of prices are favourable signals. At the same time, demand is slowing and costs remain at elevated levels. This is a tidier dataset, not a signal of full normalisation.
6. Operational conclusion
June is less strong than May, but more balanced. Manufacturing and services remain in expansion, new orders stay positive, and no demand breakdown is emerging. The pace is slowing, however: PMI, output, activity and new orders all retreated compared to the prior month.
The brightest spot comes from employment. Services return above the 50 mark and manufacturing approaches the expansionary threshold. Prices also send a more favourable signal, with a sharp decline in manufacturing and a retreat below 70 in services. The issue is that levels remain elevated, so normalisation cannot be taken for granted.
Final reading: the US economy is growing more slowly than in May, but with a healthier composition. The next release will need to clarify whether the recovery in services employment marks the beginning of a more sustainable normalisation or merely a temporary pause within a still-costly cycle.
Source: ISM Manufacturing PMI® Report and ISM Services PMI® Report, June 2026 data. This document is intended for informational, educational and methodological purposes only. It does not constitute personalised advice, an investment recommendation or a solicitation of public savings.
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