Factory job cuts in June neared financial crisis and Covid levels, S&P says

Factory job cuts in June 2024 approached levels not seen since the 2008 financial crisis and the early months of the COVID-19 pandemic, according to S&P Global.

Despite the significant reduction in manufacturing employment, S&P Global's Purchasing Managers' Index (PMI) for the manufacturing sector exceeded expectations for June. This resilience in the overall index was attributed primarily to a substantial inventory rebuild by businesses.

The data indicates that while the manufacturing sector is experiencing an uptick in inventory management, this is occurring concurrently with a sharp decline in its workforce. This divergence suggests a complex economic environment where companies are strategically adjusting their operational footprints.

Specifically, the rate of job shedding in June was notably high, signaling a period of significant restructuring within the factory sector. This trend contrasts with the positive movement in the PMI, highlighting that the improvement in the index was not driven by increased hiring but by other factors like inventory adjustments.