Seasonally adjusted, the S&P Global US Manufacturing PMI® rose sharply from 49.8 in July to 53.0 in August, marking the strongest improvement in operating conditions since May 2022. This is the highest reading in over three years, signaling a solid expansion in the manufacturing sector. The upturn was driven by a surge in production and stronger growth in new orders, supported in part by inventory building. Domestic demand improved notably, even as international sales declined slightly for a second consecutive month amid ongoing trade uncertainties and tariff impacts. Input costs rose steeply, with tariffs cited as the primary driver, leading to higher selling prices. Employment increased significantly as firms hired more workers to meet rising production needs and expectations for future demand, while backlogs of work grew at the fastest pace since September 2022.

The U.S. Census Bureau reported that new orders for manufactured goods decreased 1.3% in July to $603.6 billion, following a 4.8% decrease in June. Shipments, which have been up three consecutive months, increased 0.9% to $608.3 billion, following a 0.6% increase in June. Unfilled orders, up twelve of the last thirteen months, were virtually unchanged at $1,469.6 billion, following a 0.9% increase in June. Inventories, up nine of the last ten months, increased 0.3% to $948.8 billion, following a 0.2% increase in June. The value of unfilled orders for all manufacturing industries excluding transportation was virtually unchanged at $558.3 billion, following a 0.0% change in June. Additionally, inventories for all manufacturing industries excluding transportation increased 0.3% to $759.8 billion, following a 0.3% increase in June.

The U.S. Bureau of Labor Statistics reported a modest gain of 22,000 jobs in August as the unemployment rate edged up slightly to 4.3%, with the number of unemployed rising to 7.4 million. A year earlier the jobless rate was 4.2%, and unemployment totaled approximately 7.1 million. The August job gains were led by health care (+31,000) and social assistance (+16,000), while employment in the federal government (-15,000), wholesale trade (-12,000), and manufacturing (-12,000) declined. Mining, quarrying, and oil and gas extraction also shed jobs (-6,000), while other sectors showed little change. Average hourly earnings grew by 0.3% to $36.53, marking a 3.7% increase over the past year. Meanwhile, the number of long-term unemployed (those jobless 27 weeks or more) rose slightly to 1.9 million—25.7% of the total unemployed, up from 1.5 million—21.5% a year earlier. Revisions to June and July data showed that 21,000 fewer jobs were added than previously reported.