Factory job cuts in June neared financial crisis and Covid levels, S&P says
A pedestrian walks past a recruitment sign hanging at a gas station on June 5, 2026 in Los Angeles, California.
Justin Sullivan | Getty Images
Layoffs at U.S. factories are near their highest levels since the end of the global financial crisis in 2009 and the Covid-19 pandemic, S&P Global reported Tuesday, as concerns grow about global demand and rising costs.
Although the company manufacturing index It performed better than expected for June; This came largely from stock restructuring and despite the biggest job cuts since 2009 – excluding major workforce reductions at the start of the Covid crisis in 2020.
“While there is better news from the manufacturing sector, we remain concerned that factory growth continues to be temporarily supported by inventory building amid supply fears. Supply delays became more widespread in June,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
Manufacturers stated that they have made layoffs in three of the last four months as they wanted to reduce the number of staff due to costs and demand concerns.
“Most concerning was the further decline in employment, particularly in the manufacturing sector,” Williamson said. “Excluding the pandemic, layoffs at factories remain at the highest level since 2009, reflecting concerns about rising raw material costs as well as concerns about the sustainability of the recent rise in demand.”
Despite concerns about production cuts, the employment picture is largely solid this year, with strong gains in four out of five months. manufacturing employment It increases by 23,000 by 2026, according to the Bureau of Labor Statistics.
Overall, S&P’s “flash” reading for the purchasing managers’ index was 55.7, up marginally from May and better than the Dow Jones consensus estimate of 54.8. The reading represents the percentage share of companies reporting growth for the month.
On the services side, flash PMI stood at 51.3; This was also up slightly month over month and slightly better than the consensus forecast for 51.
Companies have been under pressure this year due to a resurgence in inflation that has sent energy prices soaring, and Federal Reserve officials are considering raising interest rates or at least avoiding cuts until the situation in the Middle East is resolved. Williamson said recent headlines about a ceasefire and a possible permanent deal with Iran had triggered a slump in oil, which had helped “restore confidence” among businesses.
However, growth signs are weak for an economy that grew at just 1.6 percent on an annual basis in the first quarter and a weak 0.5 percent in the fourth quarter of 2025.
“The survey shows current production levels are consistent with the economy struggling to grow much faster than the 1% annual growth rate in the second quarter,” Williamson said.
But Federal Reserve Chairman Kevin Warsh last week described economic growth as “robust” and attributed “increased uncertainty” in part to Middle East conflicts.
