The ISM® (Institute for Supply Management®) Manufacturing PMI® reported in at 46.0% for June as business activity fell 0.9 percentage points from the previous month, this represents the eighth consecutive month of contraction. A value below 50% is indicative of a shrinking economy. “The U.S. manufacturing sector shrank again, with the Manufacturing PMI® losing ground compared to the previous month, indicating a faster rate of contraction. The June composite index reading reflects companies continuing to manage outputs down as softness continues and optimism about the second half of 2023 weakens.” said Timothy Fiore, chairman of the ISM® Manufacturing Business Survey Committee. Of the six largest manufacturing industries, only transportation equipment, recorded growth in June. All three sub-indices – new orders, prices, and employment reported below 50. The index for new orders contracted for the tenth straight month climbing 3.3 percentage points to 45.6%. The Prices Index which measures what companies pay for raw materials and other supplies dropped 2.4 percentage points to 41.8%. The Employment Index, declined 2.2 percentage points to 48.1%, indicated employment contracted after two months of expansion. The Backlog of Orders Index declined 1.2 percentage points to 38.7% and is at a level not seen since early in the coronavirus pandemic (May 2020)

The minutes from the June FOMC meeting showed that some members had initially supported another interest rate hike to temper inflation, before changing to unanimously deciding not to raise the benchmark federal funds rate. FOMC members indicated “...that leaving the target range unchanged at this meeting would allow them more time to assess the economy's progress toward the Committee's goals of maximum employment and price stability“. Almost all FOMC members noted in their economic projections that they judged that additional increases in the target federal funds rate during 2023 would be appropriate. Further tightening is likely to be at a slower pace than the aggressive campaign of 10 consecutive increases. The FOMC indicated that two more quarter percentage-point increases to its benchmark lending rate were likely. The FOMC’s June 14 projections showed the federal funds rate will likely reach 5.6% by the end of the year, up from the 5.1% projected in March. In addition, the projections showed 16 of 18 participants anticipated at least one more rate hike in 2023, while 12 expected two or more.

The U.S Bureau of Labor Statistics Job Openings and Labor Turnover Survey, or JOLTS reported 9.8 million job openings as of the last day of May, (-496,000) lower than April’s upwardly revised 10.3 million (from 10.1 million) reading. Industries contributing to the decrease included health care and social assistance (-285,000), finance and insurance (-139,000), and other services (-78,000). Job openings increased in educational services (+45,000), state and local government education (+37,000), and federal government (+24,000). Led by health care and social assistance (+69,000) and construction (+57,000), the number of people who voluntarily left their jobs increased (+250,000) to 4.0 million. The number of people who quit their jobs for other opportunities made up 2.6% of the workforce in May, up from 2.4% the previous month. Layoffs and discharges held steady at 1.6 million, while the rate was unchanged at 1.0%. The number of hires increased slightly (+107,000) to 6.21 million. The hiring rate increased by 0.1% to 4.0%. There were 1.6 available jobs for each unemployed person in May.