ISM Manufacturing hit 54% in May, the highest since 2022. Capacity just got tighter.
Industrial demand pulled forward into May while diesel kept falling, and freight cost isn't following.
ISM Manufacturing PMI May came in at 54%, up 1.3 points from April and the highest reading since May 2022. New Orders jumped to 56.8%, fifth straight month in expansion, Production at 56.1%. Four of the six largest manufacturing industries reported new orders growth, Transportation Equipment, Computer & Electronic Products, Machinery, and Chemical Products. Nineteen straight months of overall expansion.
Greer's post-Mexico plan Greer said May 26 the US plans to keep tariffs on Mexico and Canada while it runs large trade deficits, and Reuters reported he told Mexican industry that auto and steel tariffs should stay under a revised framework. Once US-Mexico bilateral wraps, Trump and Greer pivot to Canada for a separate bilateral, Canada stays outside the trilateral lane until Mexico closes.
Ebrard's read Mexico's economy minister called the 50% steel and aluminum tariffs "unsustainable and unjustified" Friday, with Mexico working 52 US demands plus 12 of its own. Ebrard pushed for a "systemic approach" to compete with Asia, same language Greer's been using since January.
Canada in USMCA limbo No bilateral date confirmed, Canada still pays 25% on steel, aluminum, and non-USMCA-compliant autos, plus 35% on non-USMCA-compliant goods since August. 85% of Canada-US trade still moves tariff-free under USMCA, which is the reason nobody's rushing to fix the rest.
DIESEL PRICES, Week of June 1, 2026
EIA on-highway diesel dropped to $5.350 per gallon, down 17.3 cents on the week, the steepest weekly decline of the year.
Region | 05/18/26 | 05/25/26 | 06/01/26 | vs week ago |
|---|---|---|---|---|
U.S. | 5.596 | 5.523 | 5.350 | -0.173 |
East Coast (PADD1) | 5.420 | 5.394 | 5.237 | -0.157 |
Midwest (PADD2) | 5.749 | 5.623 | 5.392 | -0.231 |
Gulf Coast (PADD3) | 5.122 | 5.045 | 4.900 | -0.145 |
Rocky Mountain (PADD4) | 5.549 | 5.493 | 5.331 | -0.162 |
West Coast (PADD5) | 6.524 | 6.500 | 6.398 | -0.102 |
California | 7.222 | 7.182 | 7.051 | -0.131 |
Prices include all taxes. Source: EIA On-Highway Diesel Fuel Prices.
Gulf Coast broke below $5 for the first time since the Iran conflict began, the Midwest gave back 23 cents in a week, and coast-to-coast spread sits at $2.15 between Gulf Coast and California.
WHAT ELSE HAPPENED
Hormuz turned back into a risk on Monday Iranian media reported Tehran suspended communications with Washington over Israeli strikes in Lebanon. WTI jumped 6% intraday to $92 and Brent climbed 4% before paring back. Trump said Israel and Hezbollah agreed to pause attacks and that talks are continuing. Tuesday morning Brent sits at $94.58, WTI at $91.77, both down from Monday's highs.
Oil had its worst month since COVID Brent dropped 19% in May, WTI 16.5%, with crude still sitting around 30% above pre-conflict February levels. DHL is telling customers four to six months to full normalization even if a Hormuz deal lands. EIA's May Short-Term Energy Outlook had Brent at $106 per barrel through Q2, dropping to $89 in Q4 2026 and $79 in 2027.
Truckload spot rates at $2.89 per mile, highest since 2022 National dry van spot, fuel inclusive, broke out to a new cycle high. Tender rejections sit at 13-14%, levels not seen consistently since the post-COVID unwind. SONAR Carrier Net Revocations are running 31% above 2025 and new operating authorities are down 22%. The FMCSA CDL crackdown is shrinking the driver pool in real time, bankruptcies kept rolling through May at carriers of every size.
Manzanillo congestion sits behind Mexico's export record The port handles 41% of Mexico's containerized cargo and roughly 4,000 truck movements a day. Last May's customs strike pushed berth wait times to 1.8 days, the highest of 2025, and recovery took weeks rather than days. With April exports at historic highs and intermediate imports running at 80% of total, the chokepoint has less room for absorption than the headline numbers suggest.
BLACKETT.