US Manufacturing Growth Slows in June, ISM PMI Hits 53.3

The Institute for Supply Management (ISM) released its Manufacturing Purchasing Managers' Index (PMI) for June, indicating a moderation in the expansion of the US manufacturing sector. The index registered 53.3, falling short of the consensus estimate of 54.0 and declining from May's reading of 54.0, which had been the highest point since May 2022. This data offers a snapshot of the economic health of a key sector, which can influence currency valuations and commodity prices, particularly for industrial metals and energy, making it relevant for retail forex and CFD traders.

Key components of the report showed varied performance. The New Orders sub-index came in at 56.0, down from the prior month's 56.8. Production also saw a decrease, falling to 52.2 from 54.3. On the employment front, the index improved slightly to 49.7 from 48.6, though it remained in contraction territory, indicating a net reduction in manufacturing jobs. The Prices Paid index, a measure of inflation at the producer level, decreased significantly to 73.0, compared to an estimate of 78.0 and the previous 82.1, suggesting some easing in input cost pressures.

Sub-Index Performance and Sector Trends

• New Export Orders: Declined to 48.5 from 50.6, moving into contraction.
• Imports: Registered 52.9, a slight decrease from 53.0.
• Inventories: Slightly lower at 42.3 compared to 42.7.
• Supplier Deliveries: Slowed to 57.4 from 60.6, indicating somewhat faster delivery times.

The overall Manufacturing PMI has now been above the 50.0 expansion threshold for six consecutive months, following a ten-month period of contraction. Four of the five sub-indexes directly contributing to the Manufacturing PMI — New Orders, Production, Supplier Deliveries, and Inventories — were in expansionary territory, an increase of one compared to May. Among the six largest manufacturing industries, five reported expansion in June, with Petroleum & Coal Products being the sole exception.

A PMI reading above 50.0 generally signals an expanding manufacturing sector, while a figure below 50.0 suggests contraction. The June data indicates that while the sector continues to grow, the pace of expansion has slowed, with some underlying components showing moderating activity or slight improvements from prior contractions.