News & Insights

In March, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index recorded a 0.7% annual gain, down slightly from a 0.8% rise in February. The 10-City Composite increased 1.4%, down from 1.5% the previous month, while the 20-City Composite rose 0.8% year-over-year, down from 0.9% in February. Chicago again posted the highest annual gain at 6.1%, followed by New York at 4.0% and Cleveland at 3.0%. Meanwhile, Seattle posted the lowest annual return, with prices falling 2.5%.

On a month-over-month basis, the U.S. National Index advanced 0.7% before seasonal adjustment. At the same time, the 10-City and 20-City Composites both stepped up, rising 1.2% and 1.0%, respectively. After seasonal adjustment, the U.S. National Index and 20-City composite both ticked down 0.2%, while the 10-City Composite edged down less than 0.1%. The Northeast and Midwest continue to outperform other regions, but the housing market overall appears to be at a standstill, with price growth barely positive. Meanwhile, in addition to Seattle, Denver (down 2.0%), Tampa (down 1.9%), Dallas (down 1.7%), Phoenix (down 1.6%), Los Angeles (down 1.6%) and Washington, D.C. (down 0.1%) exhibited declines in March.

Despite a slight lift in prices that generally occurs in the spring season, more than half of the 20 major U.S. housing markets recorded year-over-year price declines in March. Climbing mortgage rates continue to hurt affordability and stunt demand. Overall, increases in U.S. home values remained below inflation for the 10th consecutive month, a trend that shows little signs of reversing.

Consumer confidence edged down 0.7 points in May to 93.1. Among its components, the Present Situation Index contracted while the Expectations Index improved as customers’ concerns regarding the present situation worsened and concerns about the future eased.

The Present Situation Index, reflecting current business and labor market conditions, declined 3.2 points to 121.2. Meanwhile, the Expectations Index, which reflects customers’ short-term outlook for income, business and labor market conditions, rose 1.0 point to 74.4, remaining below the recession signal threshold of 80 since February 2025.

Views of the current labor market situation worsened slightly in May, with 25.5% of consumers saying jobs were “plentiful,” down from April (26.9%), while 18.6% said jobs were “hard to get,” also down from April (19.4%). Looking to the future, 17.5% expect more jobs to be available, up from 16.7% in April, while 26.0% anticipate fewer jobs, down from 26.8% the previous month.

Consumers’ views of the economy remained pessimistic in May. In addition, mentions of oil, gas and war continued to be elevated as consumers expressed concern over the conflict in the Middle East. Consumers’ 12-month inflation expectations edged down but remained elevated, and the proportion of consumers expecting higher interest rates remained near 50.0%. At the same time, the share of consumers who believe that a recession is “very likely” over the next year rose, and the share believing a recession is “not likely” declined in May.

Buying plans for cars, with a clear preference for used cars, continued to rise in May, and purchasing plans for homes inched up. Meanwhile, consumers’ plans for buying other big-ticket items declined. At the same time, consumers’ intentions to purchase more services fell. Among service categories, restaurants, bars and take-out remained the top planned service spending category alongside streaming, internet and mobile services and beauty and personal care. Overall, consumers’ views of their current and future financial situation weakened slightly in May.

Manufacturing activity in the Fifth District rose at a faster pace in May after moving up in April, with the composite manufacturing index increasing from 3 to 13. At the same time, the local business conditions index decreased from 10 to 5 in May. Despite growth of current business conditions weakening, manufacturers are more optimistic about the future, with the outlook for future local business conditions climbing from 3 in April to 17 in May. The Fifth District consists of Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia.

Among its components, shipments turned positive, rising from -2 in April to 16 in May, while new orders advanced from 8 to 17. The index for employment stepped up from 0 to 3, while the index for vendor lead times stayed the same at 14. Meanwhile, the share of firms reporting backlogs increased from 0 to 4. At the same time, the average growth rate of both prices paid and prices received slowed in May.

Looking ahead, firms expressed an expectation that prices paid would increase at a slower pace over the next 12 months, while prices received would rise at a faster pace. Expectations for future shipments and new orders both strengthened, moving from 21 to 35 and from 26 to 36, respectively. Expectations for backlogs jumped from 0 to 10. Meanwhile, firms’ expectations about equipment and software spending turned positive, stepping up from -5 to 3. In sum, businesses in the Fifth District are more optimistic about future business conditions and future investment plans.

In May, Texas factory activity expanded at a slower pace after strengthening the prior month. The production index decreased from 19.0 to 9.4, falling slightly below the series average of 9.6. The new orders index stepped down 3.5 points to 6.4, while the capacity utilization index fell 14.6 points to 5.2, below the series average of 7.5. Meanwhile, the shipments index declined 7.6 points to 7.4, slightly below the series average of 7.8. The Eleventh District consists of all of Texas, northern Louisiana and southern New Mexico.

Perceptions of manufacturing business conditions improved slightly in May, with the general business activity index moving up 2.7 points to 0.4. At the same time, the company outlook index remained positive but slipped 2.7 points to 0.3. Moreover, the uncertainty index rose 1.3 points to 19.2, remaining above the series average of 16.9.

Labor market indicators suggested a slight uptick in headcounts and a longer workweek in May, with the employment index moving up 1.1 points to 0.2 and the hours worked index decreasing 2.2 points to 1.8. Of those surveyed, 17.7% reported net hiring, while nearly the same percentage (17.5%) noted net layoffs.

Price pressures were mixed, while wage pressures weakened in May. The prices paid for raw materials index rose 5.7 points to 42.7. Meanwhile, the prices received for finished goods index fell 8.7 points to 18.9, both higher than the series averages. The wages and benefits index ticked down 1.2 points to 23.6, also remaining above the series average of 21.0.

The outlook for future manufacturing activity strengthened in May, with the future production index rising 2.2 points to 36.8 and climbing above the series average of 36.0. Furthermore, the future company outlook index moved up 0.9 points to 16.5, while the future general business activity index inched up 0.2 points to 14.3, remaining above the series average of 12.3.

Building permits increased 5.8% in April but ticked down 0.2% over the year. Permits for single-family homes in April declined 2.6% and 5.5% over the year. On the other hand, permits for buildings with five or more units surged 22.7% from March and 11.5% over the year.

In April, housing starts decreased 2.8% from March but rose 4.6% over the year. Starts for single-family homes fell 9.0% from March and 2.4% over the year. Meanwhile, starts for buildings with five or more units advanced 14.3% over the month and 23.3% over the year.

Housing completions stepped up 4.8% over the month but slipped 2.0% over the year. Single-family home completions decreased 1.0% from March and 7.0% from April 2025. At the same time, completions for buildings with five or more units climbed 16.5% over the month and 6.4% from one year ago.

The S&P Global Flash U.S. Manufacturing PMI rose for the 10th consecutive month from 54.5 to 55.3 in May, a 48-month high. Factory production improved at its fastest rate since April 2022, while new orders growth slowed but marked its second-fastest pace of growth over the past four years. Meanwhile, export orders continue to decline amid the conflict in the Middle East.

Inventories increased in May as the stock of factory inputs rose at its fastest pace since April 2022. At the same time, supplier delivery times lengthened to the greatest extent since August 2022, with respondents reporting war-related shipping disruptions and stock piling exacerbating existing tariff-related supply constraints. Meanwhile, manufacturers’ input cost inflation jumped in part due to supply constraints and increased energy prices, and selling price inflation rose to its highest level since August 2022. Overall, price increases accelerated for manufacturers as well as the service industry.

Overall business activity stayed the same in May, remaining at 51.7 from April. Further, the growth rate in the services sector moderated, decreasing to a two-month low. Overall, new orders growth cooled but remained elevated as companies continue to build up safety stock. Employment fell overall as the rate of job losses reached its highest point since August 2024 due to concerns over rising costs and deteriorating demand.

On the other hand, manufacturers’ optimism about future business conditions continued to rise in May to the highest level since February 2025. The optimism reflected the recent upturn in orders as well as ongoing hopes of tariff-related reshoring. At the same time, service sector optimism fell over concerns of the demand outlook being affected by surging prices and higher uncertainty.

In May, Philadelphia’s regional manufacturing activity contracted slightly after four consecutive months of growth, with the index for general business activity falling from 26.7 to -0.4. This month, 22.9% of firms noted decreases in activity, while 22.5% reported increases. New orders declined, moving from 33.0 to -1.7, while shipments grew at a slower pace, dropping from 34.0 to 4.9. Meanwhile, the employment index improved but remained negative, increasing 2.3 points to -2.8, and the average employee workweek stepped down 6.5 points to 1.2.

The prices paid and prices received indices declined in May, decreasing from 59.3 to 47.9 and from 33.5 to 26.3, respectively. As has been the case for many months, the prices received index remained lower than the prices paid index, indicating that manufacturers have been absorbing a portion of higher costs paid.

Looking ahead, most indicators showing expectations for future growth rose in May. After ticking up 0.8 points in April, expectations for future business activity climbed 12.4 points to 53.2 in May. The rise primarily came from a gain in the proportion of firms expecting increases in activity (66.5%). At the same time, the number of firms anticipating a decrease in activity (13.2%) was lower in May. The future new orders index advanced from 45.7 to 53.5, and the future shipments index moved up from 40.8 to 45.7. On the other hand, the capital expenditures index fell from 35.2 to 30.9. The future prices paid and prices received indices increased from 50.2 to 70.0 and from 50.2 to 60.5, respectively. Additionally, the index for future employment stepped down from 35.9 to 31.7.

In May, firms were asked about changes to core customers’ price sensitivity and anticipated cost changes. Of those responses, 42.3% of firms view core customers as more price sensitive since the prior quarter, up from 30.8% when this question was asked in February. Meanwhile, 48.0% of firms expect near-term price changes in their industry’s costs, while 52.0% do not. When asked about how they anticipate competitors to respond, 75.0% anticipate them to raise prices in the near term, while none believe they will lower prices. Looking forward, those who anticipate a price change from their competitors estimate that they will change prices in three months.

Manufacturing activity grew at a slightly slower pace in the Tenth District in May, with the month-over-month composite index decreasing to 8 in May from 10 in April. Meanwhile, expectations for future activity ticked up 1 point to 19. The month-over-month activity slowdown was due to a decline in growth of durable manufacturing, which offset a gain in nondurable manufacturing. At the same time, the majority of the indices remained positive but grew at a slower pace in May. The Tenth Federal Reserve District encompasses the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming; and the northern half of New Mexico.

The production and shipments indices remained positive but slowed, declining from 10 to 9 and from 15 to 7, respectively. Meanwhile, new orders ticked up from 12 to 13, while the employment index turned negative, falling from 2 to -4 in May. The backlog of orders index jumped from 2 to 14. At the same time, the pace of growth for prices paid was unchanged at 63, while prices received advanced 4 points to 29. Furthermore, the indices for prices received and paid both increased over the year, rising to 72 and 89, respectively.

In May, survey respondents were asked special questions about changes in input and output prices and hiring and capital investment plan changes. Nearly two-thirds (65%) reported their input prices are changing more often than last year, compared to one-quarter seeing the same pace of changes and 10% citing less frequent changes. When asked about output prices, 33% reported output prices changing more often, 53% noted the same pace and 14% mentioned less changes. When asked about hiring, 22% expect to hire more workers, 20% expect to hire less and 58% have not changed their hiring plans since the start of the year. Further, 23% expect to decrease capital investments, 15% plan to increase capital investments and 62% have not changed their capital investment plans since the start of the year.

Washington, D.C. – Following the successful vote in the House Transportation and Infrastructure Committee to advance the bipartisan BUILD America 250 Act, National Association of Manufacturers Executive Vice President Erin Streeter released the following statement:

“Chairman Graves, Ranking Member Larsen and the full T&I Committee have offered a down payment on America’s future growth with a thoughtful bill that recognizes the urgent infrastructure and permitting challenges facing manufacturers and the broader economy.

“Manufacturers depend on reliable roads, bridges, ports and rail infrastructure to move goods efficiently, strengthen supply chains and drive economic growth. When America’s infrastructure moves, America’s economy moves with it.

“Today, highway congestion and bottlenecked ports cost manufacturers nearly $40 billion annually, while freight delays drain 65 million hours of efficiency each year—driving up costs, slowing shipments and weakening competitiveness. And that’s before accounting for America’s broken permitting system, which costs manufacturers nearly $8 billion annually.

“Manufacturers asked Congress to begin the work toward developing long-term solutions for Highway Trust Fund solvency; invest in our mass transit, rail, aviation, maritime and water infrastructure; and pass comprehensive permitting reform—all with an eye toward keeping workers and the traveling public safe. The BUILD America Act answers that call and advances meaningful progress on these priorities. We commend the members of the committee for their work on this bill and urge Speaker Johnson to bring it to the floor so manufacturers can realize the benefits of this legislation through growth and innovation that will support our nation’s broader economic prosperity. Because when manufacturing wins, America wins.”

Background

As Politico first reported in April, the NAM called on Congress to make the next surface transportation reauthorization a robust $600 billion investment.

In February, the NAM launched “Building to Win,” a national campaign urging Congress to pass robust infrastructure investments and reauthorize critical federal highway programs. As part of the campaign’s launch earlier this year, the NAM released a roadmap outlining four pillars for a robust surface transportation reauthorization:

• Continuing robust investment levels for federal infrastructure, including by developing long-term solutions for Highway Trust Fund solvency
• Strengthening supply chains across transportation modes
• Investing in water infrastructure that will support manufacturing growth and public health
• Reforming burdensome permitting laws and regulations to ensure federal infrastructure investments are made efficiently and responsibly

The NAM’s policy roadmap also features original analysis:

• The NAM’s analysis shows that highway congestion costs manufacturers more than $25 billion annually and results in over 65 million hours of delays in freight carrying finished goods and critical inputs each year.
• The analysis also visualizes, through a new map, key logistics nodes intersecting with the nation’s 25 worst freight bottlenecks, revealing more than 2 million hours of annual delays incurred and faced by manufacturers.
• In addition, the NAM estimates that congestion at container and bulk ports cost manufacturers more than $13 billion annually in carrying costs and demurrage charges.

In March, the NAM and the Foundation for American Innovation released a report showing America’s broken permitting system costs manufacturers in America at least $7.9 billion each year.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.96 trillion to the U.S. economy annually and accounts for nearly 52% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

The NFIB Small Business Optimism Index edged up 0.1 point to 95.9 in April, remaining below the 52-year average of 98. April’s increase was due to improvements in most indices, with the largest uptick in earnings trends, which were partially offset by a notable decline in expected business conditions. Of the 10 components included in the index, seven increased and three decreased. Meanwhile, the Uncertainty Index fell 4 points to 88, still well above the 51-year average (68) and above the average since 2016 (80).

Labor quality was cited as the top concern for small business owners, with 18% reporting it as the most important problem, up 3 points from March. Among respondents, 34% reported they were struggling to fill jobs and 53% were hiring or trying to hire in April, both up from March. The share of business owners reporting taxes as the top problem fell 2 points from March to 17%. Meanwhile, inflation ranked third in the list of concerns, with 16% reporting it as their top problem, up 2 points from March, with a net 30% of owners raising prices.

A net 30% of small business owners reported raising compensation, down 3 points in April after moving down 1 point in March. Meanwhile, 18% of business owners plan to increase compensation in the next three months, unchanged from March. Pressure on profitability weakened in April, with positive profit trends rising 6 points from March to a net negative 19%. Among owners reporting lower profits, 33% blamed weaker sales, 15% mentioned usual seasonal changes, 13% cited rising material costs, 9% noted labor costs and the same percentage mentioned price changes on their products or services. Meanwhile, 3% of owners reported that their last loan was harder to get than previous attempts, down 2 points from March, and a net 2% of owners cited paying a higher interest rate on their most recent loan, up 5 points from the prior month.

The outlook for general business conditions declined 7 points to 4%, in line with the historical average. Furthermore, expectations for better business conditions are down 11 points from April 2025. At the same time, 7% reported that it is a good time to expand their business, down 4 points from March and a weak reading compared to times of economic expansion. Overall, small business owners remain relatively pessimistic about the outlook as expected business conditions fell for the fourth consecutive month and to its lowest level since October 2024.