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The S&P Global U.S. Manufacturing PMI climbed to 52.9 in June, well above expectations of 52.0 and improving from May’s 52.0, marking the strongest reading since July 2022 and signaling a firm expansion in factory activity.

The stronger PMI reflects accelerating growth in new orders and production, with firms reporting improving demand conditions both domestically and internationally. Employment in the sector also expanded, and supplier delivery times shortened, indicating healthier supply chain dynamics.

Analysts highlight that the solid uptick in the PMI suggests resilient momentum in U.S. manufacturing, even as elevated borrowing costs persist, and underscores manufacturing’s potential to support GDP growth in the second half of 2025.

• The 3-month Treasury bill was awarded at a yield of 4.250%, up from the previous 4.195%, reflecting marginally higher short-term borrowing costs as markets adjust expectations for Federal Reserve rate cuts.
• The 6-month Treasury bill cleared at 4.150%, rising from the prior 4.120%, indicating solid investor demand but slight upward pressure on yields in the face of lingering inflation concerns and cautious Fed messaging.

The uptick in yields suggests persistent uncertainty around the timing of monetary easing, with investors demanding a modest premium for holding short-term U.S. government debt amid evolving macroeconomic signals.

• The Chicago PMI fell to 40.4 in June, below expectations of 42.7 and roughly flat compared to May’s 40.5. The reading signals continued deep contraction in Midwest manufacturing, with the index stuck well below the 50 threshold separating expansion from contraction.
• The Dallas Fed Manufacturing Business Index improved slightly to -12.7, up from May’s -15.3, but still solidly in negative territory, reflecting persistent weakness in Texas factory activity amid sluggish demand and ongoing cost pressures.

The data highlight broad-based softness in U.S. manufacturing, with both regional surveys pointing to shrinking new orders and weak production. Analysts note that the continued downturn in these gauges may weigh on national ISM readings and signal further headwinds for the industrial sector in the second half of 2025.

• Core PCE Price Index (YoY) rose to 2.7%, up from 2.6% and above expectations, indicating persistent underlying inflationary pressures.
• Core PCE (MoM) climbed 0.2%, slightly above forecasts of 0.1%.
• Headline PCE Price Index (YoY) held steady at 2.3%, in line with expectations, while headline PCE (MoM) was unchanged at 0.1%, suggesting overall inflation remains sticky but stable.
• Personal Income (MoM) dropped 0.4%, a sharp reversal from April’s +0.7% and well below the expected +0.3%, reflecting softness in wage and investment income.
• Personal Spending (MoM) fell 0.1%, missing expectations (+0.1%), while Real Personal Consumption (MoM) dropped 0.3%, the weakest reading since early 2022 — signaling cooling consumer demand.

These figures highlight a challenging backdrop for the U.S. economy: while inflation remains elevated, slowing income and spending growth could weigh on second-quarter GDP, and may complicate the Federal Reserve’s timing for any potential rate cuts.

• The 4-week Treasury bill was awarded at a yield of 4.000%, slightly below the prior 4.060%, indicating steady short-term demand.
• The 8-week bill yield came in at 4.390%, also lower than the previous 4.470%, reinforcing the trend of mildly falling short-term yields.
• The 7-year note auction cleared at 4.022%, sharply down from 4.194%, suggesting strong investor appetite for longer-duration securities amid softer economic data and potential Fed rate cuts later this year.

The auctions reflect robust demand across maturities, especially for longer-term debt, as markets weigh signs of slowing inflation and growth.

• The KC Fed Manufacturing Index jumped to +5 in June, sharply up from -10 in May, signaling expansion in regional factory activity for the first time in several months.
• The KC Fed Composite Index, which averages production, employment, and new orders, also improved to -2 from -3, though it remains slightly in contraction territory.

The data points to early signs of recovery in the central U.S. manufacturing sector, supported by gains in new orders and shipments. However, the broader composite still reflects fragile overall business conditions, and uncertainty remains around costs and labor availability.

Pending home sales rose 1.8% MoM in May, significantly above expectations of just 0.2%, and marking a strong rebound from April’s sharp -6.3% decline. The Pending Home Sales Index climbed to 72.6, up from 71.3, though it remains historically low.

The rise suggests a tentative pickup in housing market activity, possibly driven by modest rate pullbacks and seasonal factors. However, the index remains well below pre-pandemic norms, indicating continued pressure from high mortgage rates, tight inventory, and affordability challenges.

• Wholesale inventories declined 0.3% MoM in May, missing expectations of +0.2%, and marking a notable reversal from April’s flat reading. This suggests distributors are adjusting stock levels downward, potentially in response to slowing demand or improved inventory efficiency.
• Retail inventories excluding autos rose 0.2%, slightly below the prior month’s 0.3% increase, indicating moderation in restocking trends across consumer goods categories.

The data reflects a cautious inventory management stance by retailers and wholesalers alike, amid mixed signals from consumer spending and ongoing uncertainty around interest rates and economic growth.

• Initial jobless claims fell to 236,000, beating expectations (244K) and marking a modest improvement from last week’s 246K.
• Continuing claims edged higher to 1.974 million, indicating some difficulty in re-employment for those already on benefits.
• The 4-week moving average declined slightly to 245,000, down from 245,750, but still hovering near recent highs.

The data suggests that while new layoffs remain relatively low, the persistence of continuing claims signals a cooling labor market, consistent with other recent indicators of economic deceleration. This may reinforce the Federal Reserve’s cautious stance as it assesses the sustainability of job market strength.

The final Q1 GDP figures reveal a weaker-than-expected U.S. economy, with a notable downward revision to growth and a steep drop in domestic demand:

• GDP (QoQ) contracted -0.5%, deeper than the previous -0.2% estimate, and a sharp reversal from 2.4% growth in Q4.
• Final Sales of Domestic Product plunged -3.1%, highlighting broad-based weakness in consumer and business spending.
• The GDP Price Index was revised higher to 3.8%, signaling persistent inflationary pressures embedded in the economy.

In a separate release, the Goods Trade Deficit widened to -$96.59 billion in May, above both expectations (-$86.30B) and the April figure (-$86.97B). The gap reflects a surge in imports amid slowing exports, and could weigh further on Q2 GDP.

Together, the data suggest the U.S. economy faced a sharp Q1 deceleration, with inflation lingering and trade dragging on growth—potentially complicating the Federal Reserve’s path forward.

Durable goods orders in the U.S. soared 16.4% MoM in May, sharply beating expectations of 8.6% and rebounding from April’s -6.6% drop. The surge was largely driven by a spike in aircraft and defense-related orders, reflecting volatile but high-value segments.

• Durables excluding defense rose 15.5%, up from -7.7% in April.
• Durables excluding transportation increased just 0.5%, indicating that underlying demand for capital goods remains modest.
• Core durable goods orders — a proxy for business investment — also rose 0.5%, in line with expectations.
• Non-defense capital goods excluding aircraft (a key business investment metric) climbed 1.7%, suggesting a resilient corporate appetite for equipment spending despite higher interest rates.

While headline growth is impressive, the underlying picture shows only gradual recovery in core demand, with transportation driving the bulk of the gains.

The final reading for Q1 shows U.S. inflation running hotter than previously estimated, while real consumer spending slowed significantly:

• Core PCE Prices (Q1) rose 3.5%, up from the prior estimate of 3.4% and well above Q4’s 2.6%, reflecting persistent underlying inflationary pressures.
• Headline PCE Prices were revised up to 3.7%, from 3.6%, reinforcing concerns that overall price pressures remain elevated.
• Real Consumer Spending was sharply revised down to 0.5%, from 1.2%, a major drop from Q4’s 4.0%. The slowdown suggests that U.S. households are becoming more cautious, likely due to high interest rates and sticky inflation.

These revisions could reinforce the Federal Reserve’s cautious stance, keeping rate cuts on hold until clear disinflation in core prices and improved household confidence emerge.