--- title: "US July ISM Manufacturing PMI Surges to Four-Year High, Beating Expectations as Demand, Production, and Employment Improve Simultaneously" type: "News" locale: "en" url: "https://longbridge.com/en/news/294742489.md" description: "The US ISM Manufacturing Index unexpectedly jumped to 55.6 in July, exceeding the market expectation of 53.9 and rising from June's 53.8, marking the highest level since May 2022. The sector has expanded for seven consecutive months, with key indicators such as production, new orders, and employment all strengthening. However, the S&P Global PMI for the same period remained at a three-month low, diverging from the ISM data" datetime: "2026-08-03T14:33:41.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294742489.md) - [en](https://longbridge.com/en/news/294742489.md) - [zh-HK](https://longbridge.com/zh-HK/news/294742489.md) --- # US July ISM Manufacturing PMI Surges to Four-Year High, Beating Expectations as Demand, Production, and Employment Improve Simultaneously US manufacturing unexpectedly accelerated its expansion in July, with activity levels reaching their highest point since 2022. This indicates that the US industrial sector continues to gain momentum, supported by resilient consumer demand, corporate investment, and government spending. Data released by the Institute for Supply Management (ISM) on Monday showed that **the July ISM Manufacturing Index rose to 55.6, higher than the market expectation of 53.9 and above June's 53.8, hitting the highest level since May 2022**. The index has remained above the 50 expansion-contraction threshold for the seventh consecutive month, indicating that manufacturing continues to expand. However, data from S&P Global showed that **the US Manufacturing PMI in July was 53.9, unchanged from June and at a three-month low**, forming a stark contrast with the ISM index. ISM data indicates that the manufacturing recovery is reflected not only in the overall index but also in significant improvements in several key sub-indices. Specifically, **the Production Index rose to 58.5, the highest level since late 2021**; the New Orders Index climbed to 56.7, showing continued strengthening in corporate demand; and the Employment Index rose to 52.8, marking the first time since September 2023 that manufacturing firms reported adding employees. The Chair of the ISM Manufacturing Business Survey Committee stated that the improvement in business activity was primarily driven by growth in orders, increased capacity utilization, and a warming labor market. ## Consumer Resilience and Investment Spending Drive Manufacturing Recovery Since the beginning of the year, US manufacturing has gradually emerged from the slump of previous years. Analysts believe that strong consumer spending, corporate capital expenditure, and substantial government investment in areas such as defense have provided support for the manufacturing sector. In July, all manufacturing sectors except chemicals reported expansion, including printing, apparel, and electrical equipment. At the same time, export demand also improved. ISM data showed that **the Export Index rose to its highest level since March 2022, while the Import Index climbed to its highest level since June 2021**, indicating a recovery in global trade activity. The improvement in manufacturing aligns with the overall resilience of the US economy. Although the market had previously worried that high interest rates might continue to suppress corporate investment and industrial activity, the latest data suggests that US companies still maintain a strong willingness to expand. ## Inflationary Pressures Remain High; Raw Material Costs and Supply Chain Risks Persist However, the manufacturing recovery is not without challenges. ISM data shows that while pressure from input costs has eased somewhat, price indices remain at elevated levels. **The July ISM Prices Paid Index fell to 71.1, its lowest level in five months, but remains significantly higher than the start-of-year level.** Companies reported that rising raw material prices, energy costs, and tariff impacts continue to push up production costs. Furthermore, the deteriorating situation in the Middle East has increased supply chain uncertainty. In July, a brief ceasefire arrangement between the US and Iran collapsed, pushing oil prices higher. The escalation of regional conflict has put pressure on energy markets and global logistics. Supplier delivery times continue to lengthen, meaning manufacturing firms still face issues with declining supply chain efficiency. ## Divergence Between Two Major Manufacturing Surveys Draws Market Attention to Economic Outlook Despite the strong performance of the ISM Manufacturing Index, another survey has released more cautious signals. Data from S&P Global showed that **the US Manufacturing PMI in July was 53.9, unchanged from June and at a three-month low**, forming a stark contrast with the ISM index. Chris Williamson, Chief Business Economist at S&P Global, stated that while the Manufacturing PMI still indicates expansion, there are some noteworthy risk signals behind the survey results. He pointed out that the growth rate of manufacturing output slowed significantly in July, new order growth weakened for the third consecutive month, and companies are reducing the inventory accumulation behavior previously adopted due to supply chain risks. Meanwhile, supply chain delays, weak exports, and customer resistance to high prices are putting pressure on future growth. Additionally, business confidence has declined. S&P Global data shows that optimism among US manufacturing firms regarding future growth prospects has fallen to its lowest level since last October. Williamson stated that under the influence of high energy prices and tariff pressures, companies are protecting profit margins by raising product prices or improving production efficiency. This has also led to continued increases in manufacturing ex-factory prices, while employment growth remains moderate. ## Fed Policy Path Still Faces Data Dependency The divergence in manufacturing data adds complexity to the market's assessment of the US economic trajectory. The ISM survey shows that US manufacturing is clearly warming up, with improvements in orders, production, and employment, which may reduce market concerns about a rapid economic cooldown. However, the S&P Global survey suggests that supply chain pressures, rising costs, and declining business confidence may still limit future growth. For the Federal Reserve, the rebound in manufacturing activity implies that the economy remains resilient, while price pressures have not completely subsided. This may lead policymakers to remain cautious regarding the pace of interest rate cuts. ### Related Stocks - [SPGI.US](https://longbridge.com/en/quote/SPGI.US.md) ## Related News & Research - [Crude Oil Tumbles 7%; ISM Manufacturing PMI Rises In July](https://longbridge.com/en/news/294717289.md) - [US ISM Manufacturing Survey Surges To Strongest In 4 Years, S&P Global Sees "Warning Signs"](https://longbridge.com/en/news/294706420.md) - [WRAPUP 1-US manufacturing activity hits more than four-year high; input prices elevated](https://longbridge.com/en/news/294719265.md) - [ISM manufacturing gauge hits highest since May 2022](https://longbridge.com/en/news/294711871.md) - [PMI manufacturing comes to flatline in July final reading](https://longbridge.com/en/news/294705027.md)