Insights 
VT 
The final reading for the US manufacturing PMI by S&P Global in June 2025 was 52.9, up from the preliminary 52.0. The growth in manufacturing was aided by increased orders from domestic and export customers.
Higher workloads have prompted factories to employ more staff, with employment growth reaching its highest since September 2022. However, increased tariffs have escalated input costs and output charges, contributing to rising factory costs in June.
Inventory And Tariff Impacts
This growth is partly due to inventory building as businesses brace for tariff-related price hikes and potential supply disruptions. There may be a slowdown in growth in the year’s second half if this trend continues. These factors have led to increased prices passed on to consumers, raising concerns about long-term inflationary pressures.
Business sentiment has improved since April, as fewer trade and tariff worries have emerged. Although US manufacturers are more optimistic, caution remains as they anticipate news on trade deals, with tariffs deadlines approaching.
What we’ve just read outlines a steady but conditional upswing in US factory activity, with an official PMI showing a confirmed increase to 52.9 — up from the earlier estimate. For context, this figure matters because anything above 50 signals expansion; it’s one of the cleaner indicators of economic activity rooted in real demand and supply. Here, the rise is underpinned by stronger orders, both homegrown and from abroad — a healthy sign of output growing.
Yet, this expansion comes at a price. Literally. Costs are creeping up, mainly from new tariffs that are feeding through to both raw inputs and the prices factories must charge. The response from businesses, as seen in hiring and restocking patterns, suggests they’re not necessarily expecting this to last unchecked. Rather, they may be accelerating activity ahead of possible supply snags or further price pressures. That’s not a long-term strategy — more a short-term safeguard.
Employment And Economic Indicators
Greenspan — the author of the employment data — signals a bounce in hiring not recorded since late 2022. This suggests real confidence in meeting existing contracts, not just optimism. However, this confidence ought not be misread as permanence. It’s fragile, in part because it depends on factors outside ordinary production cycles. If there’s any slippage in trade clarity, or if tariffs are extended or deepened, this temporary build-up could fray.
We see this pattern at the consumer end too. Price increases, though arguably necessary to protect margins, are hard to pull back once embedded. That creates risk for inflation running hotter than forecast, particularly when driven by materials rather than wage growth or productivity. Powell’s earlier warnings about second-round effects come to mind here.
Although sentiment has perked up — likely due to a settling of expectations and fewer new tariff threats — traders should not mistake this for a shift in macro conditions. Instead, it indicates that uncertainty has paused, not gone away. With negotiations still in play and timelines running down, price action could remain jumpy.
In the short window ahead, we are watching for whether firms maintain the hiring momentum or begin to ease off. Stronger employment in manufacturing tends to signal higher future wage bills and can affect cost curves for downstream sectors. Additionally, inventory positions hold particular interest — if builders ease off stockpiling later in the quarter, it’s a sign that demand signals have turned or that earlier cost assumptions were too stretched.
Levitt’s remarks about export strength also draw our attention. If that external demand falters — either via currency shifts, trade responses, or geopolitical changes — it may place further weight on the domestic picture. Factories are benefitting now because foreign customers are buying while the dollar holds favourable for sales abroad. That advantage can flip with little notice.
As such, recent pricing changes must not be viewed in isolation. They’re tied to specific pressures, not systemic strength. Therefore, any failure in upcoming talks, or a move in energy or transport costs, could disrupt what currently appears to be forward progress.
We shouldn’t exclude volatility. Volumes may look improved, but the mix of buyers and the reasons for purchasing — precautionary stock-building, early tariff avoidance — have time constraints. Those deriving forward value should recheck their assumptions with time-lagged sensitivity in mind and incorporate leading input indicators such as booking volumes and shipping delays into objective-cost models.
Longer contracts could benefit from shorter roll options if the powder remains dry. Longer exposure to directional trends might invite unnecessary risk in light of upcoming data releases and decision points tied to trade agreements. Use tighter margin boundaries once the labour data in July emerges — that will give clearer signals about how these hiring increases are either sustained or tapered back. Varied terms will offer more room to react without overcommitting to any particular trajectory.
