By Jeffry Bartash

Growth streak is strongest in 4 years, ISM shows

American manufacturers are expanding despite stiff headwinds.

High U.S. tariffs, war with Iran, a spike in oil prices, rising inflation - no matter. American manufacturers grew in June for the sixth month in a row to mark the longest streak in four years.

A closely followed ISM gauge of manufacturers dipped to 53.3% in June from 54% in the prior month, but it was still relatively robust. Any number above 50% indicates business is expanding.

"Core business remains solid in the face of ongoing geopolitical uncertainty. Cautiously optimistic that a deal will be reached to reopen the Strait of Hormuz," one senior executive told the Institute for Supply Management.

The ISM surveys executives every month about how their businesses are doing. Manufacturers employ about 13 million people and still play a vital role in the U.S. economy.

Key details: New orders, a sign of future sales, fell slightly to a still-strong 56%.

A gauge of employment was negative for the 34rd month in a row, but it hit a nearly three-year high and almost reached the 50% threshold, at 49.7%.

A separate report from ADP found that manufacturers hired more people in June.

A measure of prices dropped to a four-month low of 73% in June from 82.1% in the prior month, as oil prices returned to close to preconflict levels.

"With the potential ending of the Iran war, management is expecting us to go back to February pricing structures and plans since the increase in oil prices was driven by the war and not regular market influences," an energy-industry executive told ISM.

Still, the recent introduction of new Trump administration tariffs after a Supreme Court setback is another headache for manufacturers.

The new tariffs "continue to destroy our profitability and demand as we have to raise prices to deal with this gigantic tax," a transportation executive said, calling out "the total ineptitude of this tariff policy."

Big picture: American manufacturers are benefiting big-time from the boom in artificial intelligence. Now the apparent end of the war with Iran and tumbling oil prices should add to the momentum.

The biggest drag on manufacturers is still the high cost of the Trump tariffs.

Looking ahead: "Overall, the report points to continued resilience in the manufacturing sector and supports our view that the U.S. economy is reaccelerating," chief economist Eugenio Aleman of Raymond James said.

Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were rising in Wednesday trading.

-Jeffry Bartash

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