The American economy showed renewed momentum in June, with private business activity hitting a five-month high, driven by stronger manufacturing activity. The manufacturing sector was fuelled by the strongest growth in new orders in more than four years. The news wasn’t entirely rosy, however, as supply chain delays grew more widespread, prices remained elevated and employment declined. Still, the headline numbers point to a resilient economy.

• According to a preliminary estimate, the S&P Global US Composite Purchasing Managers Index (PMI) rose to 52.2 in June from 51.5 in May, its highest level since January 2026. Manufacturing and services sector activity improved over the month.
• US manufacturing sector activity reached its highest level since May 2022. The S&P Global US Manufacturing PMI rose to 55.7 in June. The sector benefited from a sharp increase in new orders, which drove higher output over the month.
• The US services sector saw a small uptick in activity in June, largely due to soccer’s World Cup coming to several cities across the US.
• Across the Atlantic, private business activity in Europe improved slightly in June but remained contractionary. Europe’s critical services sector shrank for a third straight month as consumers pull back on spending in response to higher prices and economic uncertainty.

Despite global economic uncertainty, trade and geopolitical tensions, the US economy continues to demonstrate its relative resiliency. Still, looking beyond the headline figures show some potential challenges, which are weighing on consumer and business confidence. The US Federal Reserve Board is carefully navigating this environment of high prices combined with solid, but relatively muted, economic activity.

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