US manufacturing activity saw a decline in June, according to the latest data, with the ISM Manufacturing PMI registering below the expansion threshold at 49.0%. Despite this contraction, factory prices continued to remain high, with the index measuring 82.1, consistent with the previous month. This persistent price pressure comes amidst production growth and increased inventory stockpiling as firms prepare for expected reciprocal tariffs in July. The S&P Global Manufacturing PMI countered with a more positive outlook, reporting a rise to 55.7%, the highest since May 2022.

Key Takeaways

• US manufacturing activity appears to have contracted in June, with the ISM Manufacturing PMI below 50%.
• Factory prices remain elevated, suggesting ongoing cost pressures despite reduced manufacturing activity.
• Market pricing suggests potential upward pressure on inflation, impacting the likelihood of annual inflation being 3.6% or less in June.

What to Watch

The Producer Price Index for June, scheduled for release on July 15, 2026, will be a significant indicator of ongoing inflationary trends. Observers will also be watching for any changes in energy prices or shifts in the Core CPI, as these factors could affect the inflation outlook. The impact of anticipated tariffs and subsequent market adjustments will be closely monitored, as they may further influence manufacturing and inflation dynamics.

Get prediction market intelligence as a structured API feed. Early access waitlist.