FX.co ★ U.S. ISM Manufacturing Employment Edges Higher in February, Still Signals Contraction

The U.S. ISM Manufacturing Employment Index ticked up in February 2026, pointing to a modest improvement in factory labor conditions while still signaling overall contraction in the sector’s workforce.

According to data updated on 2 March 2026, the employment component of the ISM Manufacturing Index rose to 48.8 in February from 48.1 in January 2026. Although the indicator moved closer to the 50-point threshold that separates expansion from contraction, it remained below that line, suggesting manufacturers are still, on balance, reducing employment rather than adding to payrolls.

The incremental gain, however, may be interpreted as a sign that the pace of job losses in manufacturing is easing. Markets and policymakers will be watching upcoming releases to see whether this nascent stabilization in factory employment can gain enough momentum to shift the index back into expansionary territory in the coming months.