Manufacturing’s on a diet and jobs are the first to go. The Fed’s got its work cut out with the factory floor shrinking

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The U.S. manufacturing recession is getting worse. The ISM Manufacturing PMI fell to 48.0 in July, its lowest since November 2024, marking the fifth month in a row of shrinking activity.
“The manufacturing sector continues to struggle with declining demand,” the ISM report said.
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/july/

New orders have contracted for six months straight. The employment index dropped 1.6 points to 43.4, its lowest since 2020. About 25% of manufacturers cut jobs last month, the highest share since June 2020.
“Payroll reductions reflect ongoing pressures across the sector,” the ISM added.
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/july/

Economist Mark Zandi from Moody’s Analytics said, “The U.S. is on the precipice of recession. The Fed will struggle to revive growth while inflation remains high.”
https://finance.yahoo.com/news/top-economist-warns-u-precipice-163523737.html

Goldman Sachs noted recent job data revisions were the largest outside recession times since 1968 and expects more adjustments next month.
https://www.benzinga.com/markets/economic-data/25/08/46819384/tom-lee-says-feds-about-to-pivot-as-goldman-warns-of-largest-jobs-revisions-since-1968-supportive-of-higher-pe

UPS’s recent behavior also signals economic trouble, acting like the U.S. faced a 2008-style financial crash.

Manufacturing keeps shrinking, jobs get cut, and economists warn tough times are near. The Fed’s usual tools may not be enough.