The Institute for Supply Management reported the US manufacturing PMI climbed to 55.6 in July, the highest since May 2022, marking seven months of expansion. [1, 2, 3] Manufacturing production surged, with the production index hitting 58.5—the strongest level since late 2021. [1, 2] For the first time since September 2023, manufacturing employment increased, supported by broad growth across industries except chemical products. [1, 2, 3]

Manufacturing prices eased but remained elevated with the prices index at 71.1, the lowest in five months but well above early 2026 levels. [1, 2, 3] Supply chains faced pressure from rising oil prices linked to geopolitical instability in the Middle East, including the collapse of the US-Iran interim peace deal, which added to input cost inflation for manufacturers. [1, 2, 4, 3]

ISM’s services PMI in July rose slightly to 54.1, signaling continued expansion but weaker employment conditions marked by the sharpest contraction since March 2026. [4, 5, 6] Rising fuel and labor costs driven by geopolitical tensions pressured profit margins and hiring decisions in the services sector. [4, 5, 6] Steve Miller, chair of the ISM Services Committee, said tariff impacts and Middle East conflict were mentioned less frequently, adding, “Overall, the US services economy continues to be resilient.” [4]

In contrast, S&P Global’s final US services PMI reading for July was revised up to 54.6, the highest since October 2025. [7] S&P Global’s services employment sub-index rose to 50.8, indicating growth and contrasting ISM’s employment contraction data. [7]

Private sector job growth was modest with ADP reporting 44,000 new jobs in July, falling short of expectations and less than half June’s revised gain of 95,000. [5, 7]

The equity markets responded positively after the release of July data, with indexes including the Dow Jones Industrial Average reaching record highs amid strong manufacturing and service activity and cautious optimism around Middle East diplomacy. [8, 6, 7]

ISM Manufacturing Business Survey Committee Chair Susan Spence said, "My gut is, it’s not just a one or two month trend. Companies are seeing six or more months of these solid demand factors going in the right direction." [2]

ISM plans to release August manufacturing data in early August, with services sector updates following shortly after.