US Manufacturing Shows Strongest Growth Since May 2022 as Employment Rebounds
The ISM Manufacturing PMI surged to 55.6 in July, the highest reading since May 2022, signaling robust expansion in US industrial activity. Employment in manufacturing climbed to expansion territory for the first time in 33 months, suggesting improving labor market conditions.
Manufacturing Momentum Accelerates
The ISM Manufacturing PMI registered 55.6 percent in July 2026 - an increase from last month and the highest reading since May 2022. Economists surveyed by Dow Jones had been expecting a 54.0 level. The survey gauges the percentage of companies reporting growth, so anything above 50 indicates expansion. This significant beat suggests manufacturing momentum is accelerating as supply chain pressures ease.
Employment Signals Labor Recovery
Employment climbed to 52.8, up 3.1 points to hits highest since August 2022 and in expansion for the first time in 33 months. Manufacturing employment entering expansion territory marks a critical turning point after nearly three years of contraction, suggesting manufacturers are ready to invest in hiring despite earlier economic uncertainties.
Orders and Production Surge
New export orders and backlog orders both rose 4.5 points to respective readings of 53.0 and 55.0, while production jumped to 58.5, up 6.3 points. The sharp jump in production combined with rising backlogs indicates manufacturers are ramping up output to meet demand, a positive signal for economic momentum in coming months.
Price Pressures Moderate
While the prices index stayed solidly in growth territory at 71.1, that was down 1.9 points from June. The moderation in the prices paid by manufacturers—reflecting lower input costs, particularly energy—aligns with falling inflation data and suggests relief in supply-side pressures that have constrained growth.