For the week ending September 5, 2025

Manufacturing is still trying to claw its way out of contraction. The labor market is clearly cooling, and the GDP estimate was pulled down a bit. But services came in stronger than expected, and productivity improved, helping to ease labor cost pressures. Overall, it’s a soft-landing tug-of-war—some things are slowing, but not everything.

Manufacturing Data

Manufacturing remains soft, with most indicators pointing to ongoing contraction despite minor gains.

• ISM Manufacturing PMI ticked up slightly to 48.7, missing expectations of 49.0 but still better than the prior 48.0. That’s five straight months below 50.

• S&P Global Manufacturing PMI surprised slightly to the upside at 53.0, ahead of last month’s 49.8 and just under the 53.3 forecast. Still, it's not enough to offset the ISM’s gloomier read.

• ISM Manufacturing Employment fell to 43.8, below the 45.0 estimate, a bad sign for factory hiring.

• ISM Manufacturing Prices dropped to 63.7, softer than expected (65.1) and down from last month’s 64.8—suggesting easing cost pressures.

• Factory Orders fell 1.3% in July, matching forecasts but showing continued weakness after a 4.8% drop in June.

Services Data

Services picked up steam, offering some offset to the manufacturing slowdown.

• ISM Non-Manufacturing PMI rose to 52.0, beating expectations of 50.9 and up from 50.1. That's a decent bump back into expansion territory.

• S&P Global Services PMI dipped to 54.5 from 55.7 and missed forecasts of 55.4, but still shows solid activity.

• S&P Global Composite PMI came in at 54.6, slightly lower than 55.1 last month.

• ISM Non-Manufacturing Employment was flat at 46.5, just a hair above last month’s 46.4—still below 50, so not a great look for hiring.

• ISM Non-Manufacturing Prices eased to 69.2 from 69.9, slightly under the 69.5 forecast. Still elevated, but heading the right direction.

Labor Market

Job growth is weakening, and unemployment ticked higher—more cracks in the labor market.

• Nonfarm Payrolls were a major miss at 22K, way below the 75K forecast and last month’s 79K.

• Private Payrolls came in at 38K, half the expected 75K, and down from 77K.

• ADP Employment added only 54K jobs vs. the 73K estimate and well below July’s 106K.

• Unemployment Rate rose to 4.3% from 4.2%, in line with expectations.

• U6 Unemployment (includes underemployed) jumped to 8.1% from 7.9%.

• Participation Rate ticked up to 62.3%, slightly higher than July’s 62.2%.

• Initial Jobless Claims rose to 237K, above the 230K estimate and 229K prior.

• Continuing Claims held steady at 1.94M, just under the forecast.

Productivity & Labor Costs

Productivity is rising faster than expected, helping to cool labor costs.

• Nonfarm Productivity jumped 3.3%, better than the 2.8% forecast and up from 2.4%. That’s a solid gain.

• Unit Labor Costs increased just 1.0%, cooler than both the expected 1.2% and the previous 1.6%—a good sign for inflation watchers.

GDP & Growth Outlook

Growth expectations were revised down slightly as factory weakness and softer jobs weigh.

• Atlanta Fed GDPNow for Q3 held at 3.0%, down from last week's 3.5%. That’s still solid but losing some momentum.

Wages & Earnings

Wage growth is stable, but annual gains are trending lower.

• Average Hourly Earnings (YoY) rose 3.7%, matching expectations but slowing from 3.9% last month.

• Monthly Wage Growth (MoM) held steady at 0.3%, matching both the forecast and previous reading.

Construction & Housing

No surprises—construction is still sluggish.

• Construction Spending was down 0.1% in July, matching estimates but still showing a slowdown from June’s -0.4%.

Speculative Positioning

Traders pulled back a bit on oil and Nasdaq exposure but added to gold.

• Crude Oil Net Speculative Positions fell to 102.4K from 109.5K.

• Gold Net Speculative Positions rose sharply to 249.5K, up from 214.3K—perhaps a defensive move.

• Nasdaq 100 Positions dropped to 15.4K, down from 36.1K.

• S&P 500 Net Positions improved slightly to -161.1K, up from -187.8K, but still deeply negative.