News & Insights

The NFIB Small Business Optimism Index inched up 0.5 points to 99.5 in December, remaining slightly above the 52-year average of 98. December’s increase was due primarily to the rise in those expecting better business conditions. Of the 10 components included in the index, two increased, three decreased and five stayed the same. Meanwhile, the Uncertainty Index dropped 7 points to 84, the lowest reading since June 2024 but still well above the 51-year average (68) and slightly above the average since 2016 (80).

Taxes were cited as the top concern for small business owners, with 20% reporting them as the most important problem, up 6 points from November. The share of business owners reporting labor quality as the top problem fell 2 points from November to 19%, with 33% struggling to fill open jobs and 53% reporting hiring or trying to hire in December. Meanwhile, inflation fell to third in the list of concerns, with 12% reporting it as a top problem, down 3 points from November, with a net 30% raising prices.

A net 31% of small business owners reported raising compensation, up 5 points in December after remaining unchanged in November. Meanwhile, 24% of business owners plan to raise compensation in the next three months, unchanged from November. Pressure on profitability weakened in December, with positive profit trends rising 3 points from November to a net negative 20%. Among owners reporting lower profits, 41% blamed weaker sales, 13% cited increased material costs, 12% mentioned usual seasonal changes, 9% reported price changes from their products or services and 7% noted labor costs. Meanwhile, 5% reported their last loan was harder to get than previous attempts, up 1 point from November, and a net negative 3% of owners cited paying a higher interest rate on their most recent loan, down 5 points from the prior month.

The outlook for general business conditions rose 9 points to 24%, the first increase since July. Despite the improvement in December, expectations for better business conditions have fallen 23 points since the start of 2025. At the same time, 13% reported that it is a good time to expand their business, unchanged for the second consecutive month and a rather weak reading compared to times of economic expansion. Overall, despite consumer sentiment remaining low, small business owners anticipate economic conditions to remain broadly favorable in 2026, with cost pressures moderating and other challenges easing.

U.S. import prices rose 0.4% from September to November, while increasing 0.1% over the year in November. Meanwhile, U.S. export prices stepped up 0.5% from September to November, while growing 3.3% over the year in November. Since the Bureau of Labor Statistics was unable to collect survey data in October due to a lapse in appropriations, indexes for that month were missing.

In November, U.S. import prices for manufacturing rose 0.2% over the year, as a surge in metals manufacturing prices offset declines across other sectors of the industry. Primary metal manufacturing experienced the most significant over-the-year U.S. import price increase in November, jumping 17.4%. On the other hand, the greatest yearly decrease in U.S. import prices occurred in beverage and tobacco product manufacturing, which fell 14.7% from November 2024. At the same time, U.S. export prices for manufacturing grew 4.0% over the year, with primary metal manufacturing exhibiting the largest rise (32.0%). Meanwhile, U.S. import prices for nonmanufacturing decreased 3.8% from November 2024, while U.S. export prices for nonmanufacturing edged down 0.6% over the year.

Fuel import prices decreased 2.5% from September to November. Over the past year, fuel import prices have dropped 6.6%, the largest over-the-year decline since August. Import petroleum prices declined 8.4% year-over-year in November, while natural gas prices surged 51.4% over that period. Nonfuel import prices ticked up 0.6% from September to November and 0.7% on an over-the-year basis. Higher prices for nonfuel industrial supplies and materials and for capital goods more than offset lower prices for foods, feeds and beverages; automotive vehicles; and consumer goods.

Agriculture export prices rose 1.3% from September to November and 2.6% over the past 12 months, driven by higher prices for vegetables, nuts and fruit. Meanwhile, nonagricultural export prices grew 0.4% from September to November and 3.3% over the year. Higher prices for consumer goods, capital goods and nonagricultural industrial supplies and materials drove the 12-month increase.

Manufacturing activity in New York state increased in January, with the headline business conditions index climbing 11.4 points to 7.7. The new orders index turned positive, rising 7.6 points to 6.6, while the shipments index jumped 21.3 points to 16.3, its highest level in over a year. Unfilled orders improved from -14.9 to -8.2, while inventories slipped 6.1 points to -2.1, indicating business inventories have started to decline. Delivery times lengthened, and supply availability improved but remained negative, increasing 2.8 points to -4.1.

Employment fell in January, with the index for the number of employees plunging 16.5 points to -9.0. Meanwhile, the average employee workweek declined to -5.4 from 2.5, signaling a decrease in hours worked from December. The prices paid index stepped down 1.4 points to 42.8, while the prices received index dropped 11.0 points to 14.4, a reflection of a slower pace of increase in both prices received and prices paid.

In January, firms’ optimism regarding the future declined slightly but remained high. The future business activity index edged down 3.2 points to 30.3. In the next six months, new orders are expected to rise but at a slightly slower pace compared to the prior month at 33.3. The future employment index rose 7.1 points to 14.9, suggesting an anticipated faster pace of employment growth over the next six months. Meanwhile, input and selling price expectations are forecasted to increase at a slower pace, falling from 55.4 to 52.6 and from 41.6 to 36.5, respectively. Furthermore, capital spending plans strengthened from December, up from 6.9 to 10.3.

In January, Philadelphia’s regional manufacturing activity rose to its highest level since September, with the index for general business activity jumping from -8.8 to 12.6. This month, 23.1% of firms reported increases in activity, while just 10.5% of firms noted decreases. The indexes for new orders and shipments both moved up, rising from 5.7 to 14.4 and from 3.2 to 9.5, respectively. Meanwhile, the employment index declined to 9.7 points as the average employee workweek shrunk 3.4 points to 9.1.

The prices paid index decreased from 49.3 to 46.9, its second consecutive monthly decline, while the prices received index rose from 26.0 to 27.8. 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, indicators showing expectations for future growth declined for the second consecutive month but remained positive. After decreasing 8.0 points in December, expectations for future business activity fell 12.6 points to 25.5 in January. The drop came from a loss in the proportion of firms expecting an increase in activity (34.9%). At the same time, the number of firms anticipating a decrease in activity (9.3%) was down from 12.6% in December. The future new orders index slipped from 39.1 to 32.9, but the future shipments index edged up from 39.9 to 40.8. At the same time, the capital expenditures index grew from 29.1 to 30.3. The future prices paid and prices received indexes increased from 64.6 to 66.6 and from 57.2 to 61.8, respectively. Additionally, the index for future employment rose from 24.7 to 28.8.

In January, firms were asked to estimate changes in various costs over the past year and anticipate changes coming in 2026. Of those responses, firms said their costs for wages, health benefits and non-health benefits rose 5.3% during 2025. Looking forward, firms expect the average costs for these to climb 6.5% in 2026. Meanwhile, firms anticipate the increase in the cost of energy, other raw materials and intermediate goods to slow over the next 12 months. When asked about factors influencing their pricing decisions for their products, maintaining steady profit margins (77%), wages and labor costs (75%) and strength of demand as well as nonlabor costs (both 74%) were cited as most important to firms.

The Producer Price Index for final demand (also known as wholesale prices) rose 0.2% over the month in November, after prices inched up 0.1% in October. Over the year, producer prices moved up 3.0% in November, up from 2.8% in October. Meanwhile, prices for final demand excluding foods, energy and trade services increased 0.2% over the month in November after rising 0.7% in October. Prices for these goods advanced 3.5% from November 2024, the largest 12-month increase since March.

Within final demand, prices for services stayed the same in November after rising 0.3% in October. Meanwhile, prices for goods jumped 0.9%, the largest increase since February 2024. Within the final demand services index, prices for bundled wired telecommunications access services moved up 4.6%, while margins for health, beauty and optical goods retailing fell 4.3%. Within the final demand goods index, prices for final demand energy climbed 4.6%, accounting for over 80% of the November increase. The price for gasoline was the primary contributor of that increase, surging 10.5%, while prices for residual fuels declined 8.6%.

Processed goods for intermediate demand stepped up 0.6% in November, the largest increase since July. Nearly three-fourths of the November advance can be attributed to a 12.4% jump in the prices for diesel fuel. The indexes for gasoline, primary nonferrous metals, commercial electric power, utility natural gas and jet fuel also rose. On the other hand, the prices for sugar and confectionary products decreased 1.3%. Over the year, the index for processed goods for intermediate demand rose 3.6%.

Meanwhile, prices for unprocessed goods for intermediate demand advanced 0.4% in November, the first increase since July. The growth was led by a 1.4% rise in unprocessed energy materials, with the 10.8% gain in the index for natural gas being a major factor. At the same time, prices for unprocessed foodstuffs and feedstuffs declined 0.9%. Over the year, prices for unprocessed goods for intermediate demand inched up 0.1%.

In December, consumer prices increased 0.3% from November and 2.7% over the year, unchanged from the 2.7% annual rise in November. Core CPI, which excludes more volatile energy and food prices, rose 0.2% from November and 2.6% over the year, also unchanged from the 2.6% 12-month increase in November.

Energy costs advanced 2.3% over the year in December, after rising 4.2% year-over-year in November. Within the energy index, gasoline prices declined 3.4% over the year, while fuel oil prices jumped 7.4%. Meanwhile, electricity prices increased 6.7% year-over-year, and natural gas prices surged 10.8%.

In December, food prices grew 3.1% over the year, after increasing 2.6% year-over-year in November, while prices for food at home advanced 2.4%. Meanwhile, prices for food away from home climbed 4.1% from December 2024, up from the 3.7% year-over-year increase in November. Of the different food groups, beef and veal and coffee continue to rise at the fastest pace, soaring 16.4% and 19.8% over the year, respectively.

The shelter index grew 0.4% from November and 3.2% over the year, the greatest factor in the all-items monthly increase and ticking up from the 3.0% annual gain in November. Meanwhile, prices for used cars and trucks decreased 1.1% over the month but rose 1.6% over the year, while new vehicle prices stayed the same over the month and ticked up 0.3% from December 2024. Relatedly, prices for motor vehicle maintenance and repair jumped 5.4% year-over-year.

Although the headline inflation rate did not accelerate from November, it is still elevated from earlier last year. Federal Reserve officials cut their interest rate target at their prior three meetings, but markets anticipate that the Federal Open Market Committee will not lower its interest rate target at this month’s meeting. While risks to the Federal Reserve’s employment mandate remain elevated, so do risks to inflation, and those two risks may be coming into balance again.

Industrial production rose 0.4% in December, while manufacturing output increased 0.2% after moving up 0.4% in November. At 97.4% of its 2017 average, manufacturing production advanced 2.0% from December 2024. Capacity utilization for manufacturing was 75.6%, unchanged from November but up 1.1% over the past year. Capacity utilization remains 2.6 percentage points below its long-term average from 1972 to 2024.

In December, most major market groups posted gains. Consumer goods production grew 0.7%, while business equipment output increased 0.8%. The decline in production of consumer durables (down 0.7%) was led by home electronics’ output falling 1.4%, while the index for consumer nondurables rose 1.1%, experiencing gains in all but two of its categories. Among business equipment, the 1.7% gain in defense and space equipment more than offset a 0.2% loss in the index for information processing equipment. At the same time, the index for materials ticked up 0.2%, while the index for construction supplies inched down 0.3%, and the index for business supplies remained unchanged in December.

Durable goods manufacturing advanced 0.1% in December and 3.1% from the year prior. Monthly growth was greatest for primary metals (up 2.4%), while wood products posted the largest decline (down 2.3%). Meanwhile, led by a 1.8% gain in petroleum and coal products output, nondurable goods manufacturing increased 0.3% in December and 1.0% from December 2024.

Washington, D.C. – The nation’s most influential manufacturing advocate, the National Association of Manufacturers, today announced that Rockwell Automation Chairman and CEO Blake Moret and The J.M. Smucker Company Chairman and CEO Mark Smucker will serve as board chair and vice chair, respectively.

“At a defining moment for manufacturing—marked by rapid technological change, global competition and the need for policies that unlock investment in America—the NAM is excited to announce the election of these proven leaders,” said NAM President and CEO Jay Timmons. “Blake Moret and Mark Smucker lead companies that sit at the heart of America’s manufacturing strength—from overseeing advanced industrial automation powering the factories of the future to delivering iconic and trusted food brands that consumers and their families enjoy every day. Their leadership and vision will help manufacturers prosper and reach new heights in the years ahead. I also want to thank Immediate Past Chair and Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer Kathy Wengel for her outstanding leadership and steady guidance—delivering new opportunities for manufacturers and positioning our industry to build on that momentum.”

“Blake has long been an advocate for modern manufacturing, championing technology adoption, workforce development and a competitive policy environment that enables manufacturers of all sizes and all industries to grow and succeed,” Timmons continued. “Mark brings a seasoned manufacturing perspective grounded in operational excellence, supply chain strength and a commitment to community. In 2025, Congress delivered vital legislation making pro-manufacturing tax policies permanent. In 2026 and beyond, our industry will use that pro-growth tax foundation to build, expand, hire and innovate. At every step, these leaders will provide invaluable counsel to lay the groundwork for policies that deliver for our industry and enable manufacturers to make the most of these tax provisions. Together, Blake and Mark will be effective champions for the comprehensive manufacturing strategy our nation needs.”

“The manufacturing industry is at the center of America’s economic strength and global leadership,” said Moret. “It is an honor to serve as chair of the NAM Board and to represent manufacturers who are innovating, investing and creating opportunity across the country. I look forward to working with Jay and the NAM team to advance policies that support growth, technology leadership and a robust manufacturing workforce.”

Moret previously served as Chair of the Board for the Manufacturing Institute, the workforce development and education affiliate of the NAM. Throughout his tenure, he was deeply engaged in efforts to build skills programs and change the perception of modern manufacturing careers.

The NAM Board of Directors guides the association’s leadership in policy advocacy, legal action, operational excellence, workforce development and news and insights. More than 200 manufacturing leaders serve on the NAM Board, helping advance an agenda that enhances manufacturing competitiveness and the industry’s ability to improve lives in the United States and around the world.

The new board leadership was elected at the September NAM board meeting.

-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 $2.90 trillion to the U.S. economy annually and accounts for 53% 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.

Washington, D.C. – Following President Trump’s proclamation adjusting imports of processed critical minerals and semiconductors—two foundational inputs for manufacturing—National Association of Manufacturers President and CEO Jay Timmons issued the following statement:

“Yesterday’s moves build on the president’s long-standing commitment to expanding manufacturing capacity in the United States and represent a meaningful step toward strengthening the critical mineral supply chains that underpin our economic and national security. We appreciate the administration for clearly recognizing that the United States’ lack of domestic processing capacity is a central vulnerability. Outdated permitting laws and procedures are constraining our ability to mine and process domestic resources, modernize infrastructure, advance research and development, shore up supply chains and enhance American competitiveness.

“Manufacturers depend on secure, sustainable supply chains for critical minerals to make everything from defense technology and energy transmission to transportation systems, automotive parts and vehicles and a wide array of advanced industrial and consumer products made here in America.

“Beyond their ubiquity in defense technology, industrial and consumer vehicles and electronics, semiconductors are also critical components in manufacturing machinery and equipment. The decision to work to secure access to critical semiconductor inputs used to build out U.S. supply chains—such as semiconductors used in automotive applications, factory robotics and industrial machinery—sends a clear signal to manufacturers and will encourage further domestic manufacturing investment.

“Last year, the NAM asked Secretary of Commerce Howard Lutnick and U.S. Trade Representative Jamieson Greer to pursue new, enforceable agreements that lock in preferential access to critical mineral inputs as we work to reduce overreliance on China and rebalance critical input sourcing. We are encouraged by the administration’s commitment to pursue these trade deals aggressively.

“Manufacturers believe that innovative critical mineral trade agreements present a powerful opportunity to secure preferential access with trusted allied partners that have complementary assets, production capabilities and expertise. These agreements can also be used to unlock beneficial investment terms to leverage co-financing and pooled capital arrangements as well as support long-term offtake agreements that strengthen supply chain certainty. By deepening strategic partnerships with our allies, the U.S. can reduce vulnerability to geopolitical risks and address unfair trading practices.

“We will continue to work with Congress and the administration to support a robust and competitive U.S. critical minerals industry—durable trade deals coupled with permitting reform to unlock domestic resources and processing—so manufacturers of all sizes have reliable access to the materials needed to produce innovative, next-generation products and to grow, compete and create jobs.”

-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 $2.90 trillion to the U.S. economy annually and accounts for 53% 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.

733 10th St. NW, Suite 700 • Washington, DC 20001 • (202) 637-3000

Nonfarm payroll employment ticked up by 50,000 in December. Meanwhile, October and November’s job gains were revised downward by 76,000 to a loss of 173,000 jobs and a gain of 56,000 jobs, respectively. Following the government shutdown, employment is still down by 67,000 from September. The 12-month average stands at 49,000 job gains per month. On the other hand, the unemployment rate edged down 0.1 percentage point from November to 4.4% in December, while the labor force participation rate also ticked down 0.1 percentage point to 62.4%.

Manufacturing employment decreased by 8,000 in December, the eighth consecutive month of job losses, after slipping by 2,000 in November. On the other hand, the collective job losses in September and October of 14,000 were revised upward by 3,000 jobs to a decrease of 11,000 jobs. Manufacturing employment is down 68,000 over the year. Durable goods manufacturing employment edged down by 3,000 in December, while nondurable goods employment fell by 5,000. The most significant gain in manufacturing in December occurred in miscellaneous manufacturing, which added 1,800 jobs over the month. Meanwhile, the most significant loss occurred in plastics and rubber products manufacturing, which shed 4,900 jobs over the month.

The employment-population ratio inched up 0.1 percentage point from November to 59.7% in December but is down 0.2 percentage points from a year ago. Employed persons who are part-time workers for economic reasons declined by 146,000 from November to 5.34 million in December and are up from 4.36 million in December 2024. Native-born employment is down 656,000 from November but up 2,043,000 over the year. Meanwhile, foreign-born employment is up 310,000 over the month and 383,000 over the year. At the same time, the native-born unemployment rate is up 0.4 percentage points over the year to 4.1% in December, while the foreign-born unemployment rate is down 0.2 percentage points to 4.1%.

Average hourly earnings for all private nonfarm payroll employees rose 0.3%, or 12 cents, reaching $37.02. Over the past year, earnings have grown 3.8%. The average workweek for all employees edged down 0.1 hour to 34.2 hours and by 0.2 hours to 39.9 hours for manufacturing employees.