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Manufacturing jobs in the US are falling at their fastest rate since the beginning of the Covid-19 pandemic, amid lingering concerns over the impact of the Iran war on American industry.
According to S&P Global’s US Flash Purchasing Managers’ Index, which surveys senior executives at manufacturing companies, employment in the sector is estimated to have fallen in June at the fastest monthly rate since May 2020, when large swaths of US industry were grinding to a halt due to pandemic-era lockdowns.
The index’s metric on employment fell from 51.6 in May to 47 in June, with figures over 50 marking an expansion and under 50 marking a contraction.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said the survey “signals that current output levels are consistent with the economy struggling to grow much faster than a 1 per cent annualised rate in the second quarter”.
He noted that while overall manufacturing output in the US was growing, the expansion was driven in part by fears over future supply disruptions and price rises associated with the Iran conflict.
“Factory job cuts are running at the highest since 2009 if the pandemic is excluded, reflecting concerns over the sustainability of the recent upturn in demand alongside worries over the escalating cost of raw materials,” said Williamson, noting responses from executives suggested they were struggling.
He added that in about a fifth of cases, executives had reported they were struggling to find workers willing or able to work in their factories.
However, he also said that “while still running at one of the highest rates seen over the past four years, input cost inflation has shown signs of cooling in June thanks in part to the lower energy prices seen at the tail-end of the survey data collection period”.
President Donald Trump has pledged to unleash a “golden age” for US manufacturing, trumpeting investment announcements totalling almost $1tn since his inauguration in 2025.
But beyond booming sectors relating to a nationwide AI data centre build-out and surging investment in defence, as well as sectors such as steel, which have benefited from Trump’s aggressive tariffs, many manufacturers wrestle with rising input costs and frequent changes in government policy.
US factory employment has fallen by 77,000 jobs since the president’s second term began, according to official data, while private spending on manufacturing construction fell in April to $15.2bn, down about 16 per cent since January 2025.
On Monday, Democratic Senators Elizabeth Warren and Mark Kelly wrote to senior Trump administration officials demanding an explanation for the country’s growing trade deficit on manufactured goods.
“Blue-collar jobs are disappearing, a trend that economists blame at least in part on the president’s historic and volatile tariff policy,” they wrote.
