Economic Data and Growth

New orders for manufactured goods were virtually unchanged in February after staying the same in January. Meanwhile, new orders for manufactured goods increased 3.7% over the year. When excluding transportation, new orders rose 1.2% over the month and 1.7% year-over-year in February. Orders for durable goods declined 1.3%, following a 0.4% decrease in January. Year to date, durable goods orders jumped 8.2%. Meanwhile, nondurable goods orders grew 1.5% in February after advancing 0.5% in January. On the other hand, nondurable goods orders edged down 0.6% over the year.

In February, the largest monthly increase occurred in mining, oil field and gas field machinery, which surged 14.2% after a 7.0% gain in January. The largest decline occurred in nondefense aircraft and parts, which plummeted 28.6% after falling 1.7% the prior month. The largest over-the-year changes occurred in nondefense aircraft and parts (up 60.8%) and photographic equipment (down 15.6%).

Factory shipments rose 1.4% in February, after increasing 0.7% in January. Shipments grew 2.7% over the year. Shipments excluding transportation similarly increased 1.4% in February, following a 0.5% uptick the previous month. Shipments for durable goods similarly moved up 1.4% in February, following a 0.9% rise in January, and are up 6.2% year to date. Meanwhile, nondurable goods shipments climbed 1.5%, after advancing 0.5% the prior month, and have declined 0.6% year to date.

Unfilled orders for all manufacturing industries edged up 0.1% in February, after increasing 0.6% in January. Unfilled orders over the year jumped 11.0%. Inventories inched up 0.1% month-over-month and 0.7% year-over-year. The inventories-to-shipments ratio declined from 1.55 in January to 1.53 in February. The unfilled orders-to-shipments ratio for durable goods moved down to 6.92 in February from 6.99 in January.

In March, consumer prices increased 0.9% from February and 3.3% over the year, up from the 2.4% annual rise in February and the greatest over-the-year increase since April 2024. Core CPI, which excludes more volatile energy and food prices, rose 0.2% from February and 2.6% over the year, up slightly from the 2.5% 12-month increase the month prior.

Energy costs jumped 10.9% over the month in March, after advancing 0.6% in February. Over the year, energy costs surged 12.5%, after ticking up 0.5% year-over-year in February. Within the energy index, gasoline prices soared 21.2% in March and 18.9% over the year, while fuel oil prices climbed 30.7% month-over-month and 44.2% year-over-year. Meanwhile, electricity prices grew 0.8% in March and 4.6% from March 2025, while natural gas prices declined 0.9% over the month but were still up 6.4% over the year.

In March, food prices stayed the same over the month but increased 2.7% over the year, down from the 3.0% year-over-year advance in February. Prices for food at home edged down 0.2% from February but rose 1.9% from March 2025, while prices for food away from home moved up 0.2% month-over-month and 3.8% year-over-year. Of the different food groups, beef and veal and coffee continue to rise at the fastest pace, surging 12.1% and 18.7% over the year, respectively.

The shelter index advanced 0.3% from February and 3.0% over the year, consistent with the 3.0% annual gain in February. Meanwhile, prices for used cars and trucks fell 0.4% over the month and 3.2% over the year, while new vehicle prices ticked up 0.1% over the month and 0.5% from March 2025. Relatedly, prices for motor vehicle maintenance and repair jumped 1.3% month-over-month and 6.1% year-over-year.

The headline inflation rate is still above the Federal Reserve’s target of 2.0% and continues to creep up from its 2025 lows. Despite labor market risks persisting, Federal Reserve officials held their interest rate target steady at their January and March meetings, and markets anticipate that the Federal Open Market Committee will keep its interest rate target unchanged again at the meeting later this month as risks to the Federal Reserve’s inflation mandate rise.

In January, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index recorded a 0.9% annual gain, down from the 1.1% gain in December. The 10-City Composite increased 1.7%, down from 2.0% the previous month, while the 20-City Composite rose 1.2% year-over-year, down from 1.4% in December. Among the 20 cities, New York posted the highest annual gain at 4.9%, followed by Chicago at 4.6% and Cleveland at 3.6%. Meanwhile, Tampa again posted the lowest annual return, with prices falling 2.5%.

On a month-over-month basis, the U.S. National Index and 20-City Composite both declined 0.1% before seasonal adjustment. At the same time, the 10-City Composite ticked down 0.03%. After seasonal adjustment, the U.S. National Index, 10-City and 20-City Composites all rose 0.2%. The Northeast and Midwest continued to outperform other regions as January continued the trend of weak price growth. Meanwhile, in addition to Tampa, the Sun Belt market kept declining, including Denver (down 2.1%), Phoenix (down 1.6%), Dallas (down 1.5%) and Portland (down 1.0%).

Affordability concerns showed no sign of easing as the market appeared to be neither recovering nor correcting. Before seasonal adjustment, 14 of the 20 major metro areas saw price declines in January. In areas where prices continued to rise, appreciation has slowed notably. Overall, home price growth trailed inflation, reducing home values over the past year.

Consumer confidence inched up 0.8 points in March to 91.8. Among its components, the Present Situation Index improved while the Expectations Index declined as customers’ concerns regarding the present situation eased and concerns about the future worsened.

The Present Situation Index, reflecting current business and labor market conditions, rose 4.6 points to 123.3. Meanwhile, the Expectations Index, which reflects customers’ short-term outlook for income, business and labor market conditions, decreased 1.7 points to 70.9, remaining below the recession signal threshold of 80 since February 2025.

Views of the current labor market situation were virtually unchanged, with 27.3% of consumers saying jobs were “plentiful,” up slightly from February (26.7%), while 21.5% said jobs were “hard to get,” also up slightly from February (21.0%). Looking to the future, 15.4% said they expect more jobs to be available, down from 16.0% the prior month, while 27.9% anticipate fewer jobs, up from 26.2% the previous month.

Mentions of high prices and inflation continued to top the list of topics influencing consumers’ views of the economy. At the same time, mentions of energy prices and the conflict in Iran picked up, while mentions of trade decreased meaningfully in March. Consumers’ 12-month inflation expectations jumped to their highest levels since August 2025, and the proportion of consumers expecting higher interest rates surged. At the same time, the share of consumers who believe a recession is “very likely” over the next year rose, but the small share thinking the economy is already in a recession was virtually unchanged.

Buying plans for cars, with a clear preference for used cars, rose in March, but purchasing plans for homes softened slightly. Meanwhile, consumers’ plans for buying other big-ticket items declined. At the same time, consumers’ intentions to purchase more services fell for every category in March. Despite declining, restaurants, bars and take-out remained the top planned service spending category in March. Overall, consumers’ views of their current financial situation strengthened slightly in March, while views of their future financial situation worsened.

In March, Texas factory activity expanded but at a weaker pace after improving the prior month. The production index decreased from 12.5 to 6.8, falling below the series average of 9.6. The new orders index declined 5.0 points to 6.1, while the capacity utilization index stepped down 4.6 points to 7.2. Meanwhile, the shipments index fell 8.1 points to 1.8. The Eleventh District consists of all of Texas, northern Louisiana and southern New Mexico.

Perceptions of manufacturing business conditions weakened slightly in March, with the general business activity index edging down 0.4 points to -0.2. At the same time, the company outlook index also turned negative, falling 6.6 points to -3.5. Moreover, the uncertainty index jumped 19.5 points to 26.0, rising above the series average and to its highest reading since April 2025.

Labor market indicators suggested a decline in headcounts and a virtually unchanged workweek in March, with the employment index decreasing 8.5 points to -1.0 and the hours worked index declining 5.2 points to 0.9. Nearly 15.0% of firms reported net hiring, while a larger percentage (16.0%) noted net layoffs.

Price pressures strengthened slightly, while wage pressures weakened in March. The prices paid for raw materials index inched up 1.0 point to 32.7. Meanwhile, the prices received for finished goods index ticked up 0.5 points to 18.4, both higher than the series averages. The wages and benefits index fell 6.7 points to 25.2, remaining above the series’ average of 21.0.

The outlook for future manufacturing activity weakened in March, despite the future production index improving 1.4 points to 35.7. Moreover, the future company outlook index declined 7.5 points to 18.2, while future general business activity decreased 2.1 points to 10.6, with both indexes dipping below the series’ averages.

The S&P Global Manufacturing PMI was 52.3 in March, up from the February reading of 51.6. New orders grew at a faster pace in March, but exports continued to decline as tariffs continued to drive up costs and hurt foreign demand. Meanwhile, input and selling prices increased at a faster pace from February, with input costs rising at the highest rate since August. The conflict in the Middle East had a notable impact on the worsening of price pressures in March, primarily from rising energy prices.

Production rose during the month, and combined with an uptick in sales and the use of safety stock accumulated over the past few months, stocks of finished goods fell for the first time in eight months. Employment did not change substantially. Meanwhile, delivery times continued to lengthen, a result of the conflict in the Middle East causing disruptions in transportation and exacerbating stock shortages at vendors.

The potential for a continuation of high sales and planned rises in capital expenditure and R&D spending kept business confidence elevated in March. At the same time, confidence softened slightly as firms noted worries over higher energy prices and tariffs.

In March, growth in global manufacturing activity weakened slightly from February, decreasing from 51.8 to 51.3. Output and new orders both grew, but there was modest deceleration in the growth of new orders and near stagnation in the volume of international trade. Meanwhile, lead times continued to slow, lengthening to the greatest extent in more than three years. Employment and inventory levels were virtually unchanged in March.

Greece, Thailand, India and Ireland had the highest PMI readings in March. On the other hand, Russia, Mexico and Brazil were some of the larger nations to register declines in activity. The slowing growth in manufacturing production occurred across consumer, intermediate and investment goods.

Meanwhile, input and output price pressures surged as input price inflation hit a 44-month high. At the same time, business optimism fell to a five-month low amid supply chain disruptions and cost pressures. Geopolitical uncertainty and surging commodity prices weighed on activity and sentiment.

Job openings for manufacturing fell by 71,000 to 439,000 in February. On the other hand, the January job openings level of 510,000 was revised upward from 495,000 in the previous report. Nondurable goods job openings in February declined 39,000 to 141,000, while durable goods job openings decreased 32,000 to 298,000. The manufacturing job openings rate dropped to 3.4% from 3.9% in January but rose from 3.1% the previous year. The rate for nondurable goods manufacturing fell 0.7 percentage points to 2.9% and 0.4 percentage points to 3.7% for durable goods manufacturing.

In the larger economy, the number of job openings dropped to 6.9 million, a decline of 358,000 from January and 360,000 from the previous year. The job openings rate edged down to 4.2% from 4.4% in both January and February 2025. This data reflects an overall labor market that has eased back to pre-pandemic levels, but remains relatively tight from a historical perspective.

The number of hires in the overall economy decreased 498,000 to 4.9 million in February and 387,000 from the previous year. The hires rate for the overall economy edged down 0.3 percentage points in February to 3.1%. Meanwhile, the hires rate for manufacturing stayed the same at 2.3%, but fell from 2.4% in February 2025. The hires rate for durable goods edged down 0.1 percentage point to 2.0%, while the hires rate for nondurable goods stayed the same at 2.6%.

In the larger economy, total separations, which include quits, layoffs, discharges and other separations, declined 173,000 from January to 5.0 million and 314,000 from the previous year. The total separations rate ticked down 0.1 percentage point to 3.1% for the overall economy but stayed the same for manufacturing at 2.3%, down from 2.5% the year prior. Within that rate, layoffs and discharges decreased by 21,000 in February for manufacturing, while quits rose by 13,000. The quit and layoff rates continued to remain lower for manufacturing than the total nonfarm sector.

In March, the U.S. manufacturing sector expanded for the third consecutive month and at a slightly faster pace than the prior month, with the ISM Manufacturing® PMI increasing to 52.7% from 52.4% in February. Certain demand indicators, such as the New Orders and Backlog of Orders indexes, remained in expansion territory, while the New Export Orders Index fell back into contraction territory. Meanwhile, the Customers’ Inventories Index continued to contract into “too low” territory but at a slower pace, climbing 1.3 percentage points to 40.1. Meanwhile, the Production Index expanded at a faster pace in March, rising from 53.5% to 55.1%.

The New Orders Index expanded for a third consecutive month in February but at a slower pace, falling 2.3 percentage points from February to 53.5%. Of the six largest manufacturing sectors, four—machinery, transportation equipment, chemical products and computer and electronic products—reported an increase in new orders. Optimism about near-term demand was mixed, with a negative comment for every positive comment.

The New Export Orders Index returned to contraction territory in March after two consecutive months of growth, dropping 0.4 percentage points to 49.9%. Respondents remained concerned about trade frictions, with a negative comment for every positive comment. Meanwhile, the Imports Index expanded for the second consecutive month but at a slower pace in March, down 2.3 percentage points from February to 52.6%.

The Employment Index contracted for the 30th consecutive month at roughly the same pace as the prior month, ticking down 0.1 percentage point from February to 48.7%. Of the six largest manufacturing sectors, two—transportation equipment and machinery—reported increased employment. For every comment on hiring, 1.2 respondents noted reduced headcounts.

After surging 11.5 percentage points in February, the Prices Index jumped another 7.8 percentage points in March to 78.3%, indicating raw materials prices grew for the 18th straight month and at a much faster pace than the prior month. Of the six largest manufacturing sectors, all reported increased prices. The increase continued to be driven by higher steel and aluminum prices impacting the entire supply chain and the tariffs applied to most imported goods, as well as increases in petroleum-based products as a result of the Middle East conflict. Roughly 59.4% of companies reported paying higher prices, the highest share since June 2022 and up from 45.4% in February and from 21.0% in January 2025.

Nonfarm payroll employment increased by 178,000 in March, coming in well above expectations. On the other hand, January and February’s collective job gains were revised downward by 7,000 to a gain of 160,000 jobs and a loss of 133,000 jobs, respectively. The industries with the most significant job gains in March were health care, construction and leisure and hospitality, each recouping the losses they incurred in February. The 12-month average stands at just 22,000 job gains per month. At the same time, the unemployment rate edged down 0.1 percentage point from February to 4.3% in March, while the labor force participation rate ticked down 0.1 percentage point to 61.9%.

Manufacturing employment rose by 15,000 in March after declining by 6,000 in February. Meanwhile, the collective job losses in January and February of 7,000 were revised downward by 3,000 jobs to a decrease of 4,000 jobs. Despite the uptick in March, manufacturing employment is still down 74,000 over the year. Durable goods manufacturing employment climbed by 15,000 in March, while nondurable goods employment stayed the same. The most significant gain in manufacturing in March occurred in transportation equipment manufacturing, which added 6,500 jobs over the month. Meanwhile, the most significant loss occurred in chemical manufacturing, which shed 5,200 jobs over the month.

The employment-population ratio edged down 0.1 percentage point from February to 59.2% in March and is down 0.7 percentage points from a year ago. Meanwhile, employed persons who are part-time workers for economic reasons rose by 101,000 from February to 4.5 million in March but are down from 4.8 million in March 2025. Native-born employment is down 194,000 from February and 395,000 over the year. Meanwhile, foreign-born employment is up 806,000 over the month but down 251,000 over the year. At the same time, the native-born unemployment rate is up 0.1 percentage point over the year to 4.3% in March, while the foreign-born unemployment rate is down 0.1 percentage point to 4.3%.

Average hourly earnings for all private nonfarm payroll employees rose 0.2%, or 9 cents, reaching $37.38. Over the past year, earnings have grown 3.5%. The average workweek for all employees ticked down by 0.1 hour to 34.2 hours but stayed the same at 40.2 hours for manufacturing employees.