Input Stories

Building permits improved 0.2% in June but fell 4.4% over the year. Permits for single-family homes in June declined 3.7% from May and 8.4% over the year. On the other hand, permits for buildings with five or more units increased 8.1% from May and 2.1% over the year.

In June, housing starts increased 4.6% from May but fell 0.5% from June 2024. Starts for single-family homes declined 4.6% from May and 10.0% over the year. On the other hand, starts for buildings with five or more units soared 30.6% over the month and 25.8% over the year.

Meanwhile, housing completions plummeted 14.7% over the month and 24.1% over the year. Single-family home completions declined 12.5% from May and 15.5% from June 2024. Completions for buildings with five or more units plunged 21.0% over the month and fell 39.8% from one year ago.

U.S. import prices inched up 0.1% in June, after slipping 0.4% in May, with higher nonfuel prices offsetting lower fuel prices. Over the past year, import prices decreased 0.2%. Meanwhile, U.S. export prices increased 0.5% in June, with nonagricultural and agricultural export prices both rising. Over the past year, export prices increased 2.8%.

In June, U.S. import prices for manufacturing rose just 0.2% over the year, but with significant divergences in prices across the industry. Petroleum and coal products manufacturing experienced the most significant over-the-year U.S. import price declines in June, falling 19.0%. On the other hand, the greatest yearly increase in U.S. import prices occurred in primary metal manufacturing, which rose 10.2% from June 2024. Meanwhile, U.S. export prices for manufacturing in June increased 3.4% over the year.

Fuel import prices fell 0.7% over the month in June, following declines of 5.0% in May and 2.6% in April. Lower prices for natural gas more than offset petroleum prices. Prices for fuel imports plummeted 15.7% from June 2024. Import prices for petroleum ticked up 0.1% over the month in June but fell 16.6% from last year. Meanwhile, natural gas prices plunged 26.8% in June but jumped 37.4% over the year.

Nonfuel import prices increased 0.1% in June, after staying the same in May. Higher prices for nonfuel industrial supplies and materials and consumer goods more than offset lower prices for automotive vehicles and foods, feeds and beverages. The price index for nonfuel imports grew 1.2% over the past year and has not declined on a year-over-year basis since February 2024.

After rising 0.3% in May, agricultural export prices increased 0.8% in June, the largest monthly increase since a 2.1% increase in October 2024. Over the past 12 months, agricultural export prices increased 1.5%. Meanwhile, nonagricultural export prices increased 0.5% in June. Higher prices for nonagricultural industrial supplies and materials, consumer goods and automotive vehicles more than offset higher prices for capital goods. Over the past year, nonagricultural export prices advanced 2.9%.

Manufacturing activity in New York state ticked up slightly in July. The headline general business activity index strengthened from June, rising 21.5 points to 5.5, the first positive reading since February. Meanwhile, the new orders and shipments indexes also increased and turned positive, to 2.0 from -14.2 and 11.5 from -7.2, respectively. Unfilled orders improved slightly but remained negative, rising from -8.3 to -6.4, while delivery times lengthened from 1.8 to 8.3. Inventories grew notably, jumping from 0.9 to 15.6, but supply availability continued to worsen, dipping from -8.3 to -11.0.

The index for the number of employees improved from 4.7 to 9.2, while the average employee workweek moved into positive territory, rising from -1.5 to 4.2. Input prices again climbed upward, from 46.8 to 56.0. Meanwhile, selling prices moderated slightly, edging down 0.9 to 25.7 points, a reflection of a slower pace of increase for prices received while the pace of prices paid quickened.

Looking forward, firms’ expectations remained elevated after last month’s jump in optimism. The index for future business activity improved 2.9 points to 24.1. In the next six months, new orders and shipments are still expected to increase, but at a slightly slower pace than anticipated last month, clocking in at 25.3 and 19.3, respectively. Additionally, capital spending plans returned to positive territory, rising 16.5 points to 9.2. Employment expectations also remained positive and little changed, inching up from 10.4 to 11.0, while the average employee workweek outlook strengthened but remained negative, rising from
-1.8 to -0.9. Input prices are expected to remain high but retracted slightly from 59.6 to 58.7. On the other hand, selling price expectations ticked up 0.9 points to 42.2. Meanwhile, supply availability is still forecasted to contract in the next six months but at a slower pace than predicted in June.

In July, Philadelphia’s regional manufacturing activity expanded into positive territory. At 15.9, the index for current general business activity recorded its first positive reading after three months of negative readings. Just 15.8% of firms reported decreased activity this month, while 31.7% saw increases in July, a substantial improvement from the 24.5% reporting increases in June. The indexes for new orders and shipments both improved, rising from 2.3 to 18.4 and from 8.3 to 23.7, respectively. These readings are the highest recorded for these two indexes since February. Meanwhile, employment also turned positive, gaining nearly 20 points and increasing to 10.3 while recovering most of the prior month’s decline.

The prices paid index jumped from 41.4 to 58.8, largely reversing last month’s decline. The prices received index also rose from 29.5 to 34.8. As has been the case for many months, the prices received index remained lower than the prices paid index, indicating manufacturers have been absorbing a portion of those higher costs paid.

Looking ahead, indicators showed expectations for future growth have perked up from the prior month. After dropping nearly 29 points in June, expectations for future general business activity ticked up more than three points to 21.5 in July. Although a lower proportion of firms (41.1%) expect increases in activity, compared to last month’s reading of 45.1%, a lower proportion of firms (19.6%) also anticipate activity will decline, compared to last month’s reading of 26.8%. Meanwhile, the future new orders index expectations rose from 22.1 to 30.0, but the future shipments index weakened from 27.9 to 23.6. The capital expenditures index rose slightly from 14.5 to 17.1. The future prices paid and future prices received indexes both edged up from 68.9 to 75.3 and from 52.5 to 59.4, respectively. Additionally, the index for future employment slipped from 24.6 to 20.1.

The Producer Price Index for final demand (also known as wholesale prices) stayed the same over the month in June, after rising 0.3% in May. Over the year, producer prices moved up 2.3%, down from the 2.7% hike in May. Meanwhile, prices for final demand excluding foods, energy and trade services also stayed the same over the month in June, after inching up 0.1% in May. On the other hand, prices for these goods advanced 2.5% from June 2024.

In June, prices for final demand services edged down 0.1%, while prices for final demand goods rose 0.3%, the largest monthly increase since February. Over half of the decline in final demand services is attributed to a 4.1% drop in traveler accommodation services prices. Meanwhile, over half of the increase in final demand goods arose from the 0.3% gain in final demand for goods less foods and energy. Within the index, prices for communication and related equipment climbed 0.8% over the month and 6.0% from June 2024. In addition, prices for private capital equipment for manufacturing industries jumped 4.2% over the year, the largest yearly increase since October 2023.

Processed goods for intermediate demand rose 0.1% in June, the same rate of increase as May. The rise can be attributed to a 0.6% gain in the index for processed energy goods. Meanwhile, the index for processed foods and feeds fell 0.3%. Over the year, the index grew 1.9%, the largest 12-month increase since the 2.1% rise in February 2023.

Meanwhile, prices for unprocessed goods for intermediate demand advanced 0.7% in June, the largest increase since January. Nearly two-thirds of the June gain can be traced to a 1.4% hike in the prices for unprocessed energy materials. Additionally, prices for unprocessed nonfood materials less energy rose 1.1%. Over the year, prices for unprocessed goods for intermediate demand declined 1.3%.

In June, consumer prices increased 0.3% over the month and 2.7% over the year, edging up from the 2.4% rise in May. Core CPI, which excludes more volatile energy and food prices, rose 0.2% over the month and 2.9% over the year, slightly higher than the 2.8% 12-month increase in the three months prior.

Energy costs jumped 0.9% over the month in June, after falling 1.0% in May, but they declined 0.8% over the year. Within the energy index, gasoline prices rose 1.0% from May, after dropping 2.6% the month prior, but they declined 8.3% from June 2024. Meanwhile, fuel oil, electricity and utility (piped) gas prices rose 1.3%, 1.0% and 0.5%, respectively, over the month.

In June, food prices increased 0.3% over the month, with prices for food at home rising at the same rate, while food prices rose 3.0% over the year. The indexes for major grocery store food groups were mixed, with half increasing and the other half decreasing. Meanwhile, prices for food away from home rose at the slightly faster pace of 0.4% from May and 3.8% from June 2024.

The shelter index grew 0.2% over the month and 3.8% over the year, dipping slightly from the 3.9% 12-month increase in May. Meanwhile, prices for transportation services advanced 0.2% over the month and 3.4% over the year, with motor vehicle insurance and motor vehicle maintenance and repair leading the increase, surging 6.1% and 5.2%, respectively, over the year. These increases more than offset decreases in airline fares, which dipped 0.1% over the month and 3.5% over the year.

Since January 2025, the over-the-year headline inflation rate has trended downward, but the inflation rate ticked up again in June, and Federal Reserve officials expect higher inflation in the coming months. Therefore, markets are anticipating that the Federal Open Market Committee will keep rates steady at its meeting next week, as it did in June. On the other hand, the possibility of a rate cut later in the year remains as weakness in the labor market has increased in recent months.

Industrial production increased 0.3% in June. Meanwhile, manufacturing output ticked up 0.1%. At 100.2% of its 2017 average, manufacturing production in June rose 0.8% from the same month last year. Capacity utilization for manufacturing rose to 76.9%, up 0.1 percentage points from May and 1.3% over the past year. Capacity remains 1.3 percentage points below its long-term average from 1972 to 2024.

In June, major market groups posted broad gains. Consumer goods production increased 0.2%, while materials output rose 0.4%. Among consumer goods, the production of durables decreased 1.4%, driven by a decline in automotive products (3.2%), while the index for nondurables advanced 0.7%, with the greatest improvement in energy goods (2.7%). Among materials, the gain was supported by a 0.9% rise in the index for energy materials. Meanwhile, the business equipment index inched up 0.1% in June, and the indexes for construction supplies and business supplies grew 0.3% and 0.4%, respectively.

Durable goods manufacturing stayed the same in June, but rose 0.8% from the year prior. Monthly growth was greatest for primary metals (3.1%), while motor vehicles and parts (-2.6%) and electrical equipment, appliances and components (-2.5%) posted the largest declines. Meanwhile, led by a 2.9% jump in petroleum and coal products output, nondurable goods manufacturing increased 0.3% in June and rose 0.4% from June 2024.

The NFIB Small Business Optimism Index remained relatively steady, edging down just 0.2 to 98.6 in June, staying just above the 51-year average of 98. June’s decrease stemmed primarily from a decline in stocks of inventories. Of the 10 components included in the index, four increased, four decreased and two stayed the same. Meanwhile, the Uncertainty Index fell five points to 89 but remains well above the 51-year average (68) and the average since 2016 (80).

Taxes were ranked as small businesses’ top concern in June, with 19% reporting them as their most important problem, up one point from May. Labor quality ranked second as the top concern for many small business owners in June, with 16% reporting it as the most important problem, the same percentage as May. In June, 36% of small business owners reported jobs they could not fill, up two points from May. The challenge of filling open positions remains acute, particularly in manufacturing, transportation and construction. Inflation ranked third in the list of concerns, with 11% reporting it as a top concern.

A net 33% of small business owners reported raising compensation, up seven percentage points from May and the largest monthly increase since January 2020. On the other hand, just 19% of small business owners plan to increase compensation in the next three months, down one point from May. The costs of labor on inflation is easing, and profitability is facing less pressure, with a net negative 22% reporting positive profit trends, which is four points better than in May. Of those reporting lower profits, 40% claimed weaker sales, 17% cited increased material costs and 10% claimed price changes for their products. A net 32% of small business owners planned price hikes in June, up one percentage point from May. Meanwhile, 5% reported their last loan was harder to get than previous attempts, up one point from May, and a net 9% of owners reported paying a higher rate on their most recent loan, up two points from the prior month.

The outlook for general business conditions fell three points to 22%. When looking at the history of the survey, the share of firms saying it is a good time to expand was low, despite rising one point to 11% in June. Additionally, there was a notable decline in the percentage of firms reporting their business operations as excellent or good, with both down six points each. With the Uncertainty Index at elevated levels, small businesses remain hesitant to plan significant investments, and job gains are slowing. At the same time, the costs associated with rising compensation are anticipated to be passed on to customers in selling prices.

In June, Texas factory activity held relatively steady following slight growth in May. The production index rose just 0.4 points to 1.3, indicating mild growth. The new orders index remained negative but improved, rising to -7.3 from -8.7 in May. The capacity utilization index also increased but remained negative, up 0.5 points to -1.0, while the shipments index turned negative, decreasing nearly eight points to -7.3.

Perceptions of manufacturing business conditions continued to worsen in June but at a slower rate of decline than the prior month, with the general business activity index rising 2.6 points to -12.7. The company outlook index also improved while remaining negative, increasing to -8.9 from -11.3. Meanwhile, the outlook uncertainty index, which has been volatile in recent months, advanced further in June, ticking up 2.5 points to 15.2. The series average is 17.2.

Labor market indicators suggested an increase in head counts and shorter workweeks in June, with the employment index rising 2.2 points to 5.7, while the hours worked index retreated further into negative territory to -8.4. Nearly 18% of firms reported net hiring, while a smaller percentage (12.1%) noted net layoffs.

Historically high upward pressure on prices worsened in June, while wage growth remained relatively stable. The prices paid for raw materials index increased slightly, from 40.7 to 43.0. Meanwhile, the prices paid for finished goods index jumped 11 points to 26.1, three times the series average. On the other hand, the wages and benefits index slipped from 15.0 to 13.4, below the series average of 21.1.

The outlook for future manufacturing activity softened from May, with the future production index falling from 31.1 to 22.6. Meanwhile, the future general business activity index and the future company outlook index both improved significantly, rising 13.1 points and 10.8 points to 14.4 and 16.4, respectively.

New orders for manufactured goods rose 8.2% in May, up five of the past six months and 3.2% over the year. When excluding transportation, new orders inched up just 0.2%. Orders for durable goods leaped 16.4%, following a 6.6% decrease in April. Year to date, durable goods orders are up 6.9%. Nondurable goods orders ticked up 0.1% in May after declining 1.0% in April. Nondurable goods orders are down 0.3% over the year.

New orders for nondefense aircraft and parts, which have been incredibly volatile in recent months, led the increase in durable goods, climbing 230.8%, following April’s 51.6% dive. In May, the largest monthly decrease occurred in mining, oil field, and gas field machinery, which fell 11.5%, after jumping 21.0% the month prior. The largest over-the-year changes also occurred in nondefense aircraft and parts (up 163.6%) and defense search and navigation equipment (down 8.2%).

Factory shipments increased 0.1% in May, after slipping 0.3% in April. Shipments over the year rose 0.7%. Shipments excluding transportation also ticked up 0.1% in May, following a 0.7% decrease the previous month. Shipments for durable goods improved 0.2% in May, following a 0.3% increase in April, and are up 1.8% year to date. Meanwhile, nondurable goods shipments recovered just 0.1% from the prior month’s 1.0% decline and are down 0.3% year to date.

Unfilled orders for all manufacturing industries rose 3.4% in May, after being flat in April. Inventories ticked up 0.1%, the same as four of the past five months, and the inventories-to-shipments ratio remained the same at 1.58. The unfilled orders-to-shipments ratio for durable goods increased to 6.98 from 6.77 in April.