Why is US manufacturing stuck in reverse despite an AI boom? The latest ISM survey reveals manufacturing shrank for a sixth straight month in August, with PMI at 48.7 (below 50 signals contraction). Tariffs are a recurring villain: production is down, forward hiring is grim (2.5 negative demand comments for every positive one), and layoffs have hit high-skilled, high-paying roles. Some manufacturers even call today’s conditions “worse than the Great Recession.”
But it's not all gloom. The new orders index ticked up to 51.4, a sliver of hope. Meanwhile, AI-driven investment is helping a few segments stay afloat—even as most sectors are struggling with evaporating demand and rising costs. The elephant in the room: will tariffs' inflationary bite reach consumers soon, just as the sector is trying to recover?
