US June Manufacturing PMI Declines to 53.9 from 55.7

The S&P Global U.S. manufacturing PMI slid to 53.9 in June from 55.7 the prior month, the firm said Tuesday. The final reading stayed above the 50 mark that divides expansion from contraction.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said the May reading was a 49-month high. "The index has moved lower of that level in the month of June," he said.

The May print was the strongest since mid-2020. The June slip brings the index back to a level that signals a slower but still positive growth pace.

Factory growth is cooling after the spring burst, the data show. Currency traders are watching whether the slowdown extends to services and the labor market, which hold more sway for the dollar. The next major test is Friday's employment report. The Fed's July rate decision will hinge on the full picture from incoming data.