Companies Are Cutting Jobs While Prices Surge — PMI Just Showed It

The May 2026 flash PMI came in at 51.7 — technically fine. But the services sector, where 70% of Americans work, clocked in at just 50.9, and businesses reported cutting payrolls even as input costs kept rising. S&P Global called out the Middle East conflict as an increasingly visible drag on the U.S. economy.

This is a stagflationary setup: slowing growth, sticky prices, and a labor market that's quietly softening. The Fed can't cut rates to fix it because inflation hasn't gone away. They can't hike without hammering an already-slowing services sector. The monthly job gain average in 2026 is 76,000 — about 40% below 2024's pace.

I built Recession Tracker (live in the App Store) specifically for moments like this, where the headlines say "expansion" but the underlying signals say something different. The app tracks PMI, the Sahm Rule, yield curve, credit spreads, and more — in plain English, updated in real time.

The interesting question to me: does a stagflationary squeeze show up in a recession call before people feel it in the job market — or after? Curious how others here are thinking about the second-half outlook.