US manufacturing falls at fastest pace in 9 months. Employment index showed biggest contraction since 2020

US manufacturing contracted in July 2025 at the fastest pace in nine months, with the employment index showing the largest contraction since 2020.

At a glance

Key Evidence

Verified August 6, 2025

Bloomberg reported on August 1, 2025, that US factory activity contracted at the fastest pace in nine months with employment declining sharply.bloomberg.com
Reuters confirmed that factory employment dropped to its lowest level since July 2020, highlighting a sustained slump.reuters.com
The ISM manufacturing index fell to 48, below the expansion threshold of 50, confirming contraction.news.bloomberglaw.com

The reporting

What the Evidence Shows

Recent data from multiple reputable sources confirm that US manufacturing activity declined in July 2025 at the fastest rate seen in nine months. The Institute for Supply Management (ISM) manufacturing index fell below the expansion threshold, indicating contraction. Specifically, factory employment decreased significantly, marking the largest contraction in employment since July 2020. This decline in employment contributed to the overall slowdown in manufacturing output and new orders.

Key points include:

The ISM manufacturing index dropped to 48 in July 2025, signaling contraction (below 50).

Factory employment index fell to its lowest level since mid-2020, reflecting a notable reduction in manufacturing jobs.

This marks the third consecutive month of declining factory employment, the longest such stretch in two years.

The contraction is driven by shrinking orders and cautious producer behavior amid economic uncertainties.

While some earlier months in 2025 showed mixed signals with occasional growth spurts, the most recent data clearly indicate a significant downturn in manufacturing activity and employment.

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