Input Stories

In October, global manufacturing activity was relatively unchanged from September, ticking up from 50.7 to 50.8. Output and new orders both rose for the third consecutive month in October. Meanwhile, inventories and lead times helped support improved operating conditions, while staffing levels remained stable for the third consecutive month. On the other hand, new export orders contracted for the seventh consecutive month and at a faster pace than September.

India, Thailand, Vietnam and Greece had the highest PMI readings in October. On the other hand, Canada, Brazil, Russia and Mexico were some of the larger nations to register declines in activity. The upturn in manufacturing output occurred across the consumer, intermediate and investment goods categories for the third consecutive month.

Meanwhile, price pressures eased to a five-month low, with investment goods being the only sector to see an acceleration. Forward-looking indicators were mixed, with business optimism falling to a six-month low despite manufacturers expecting gains in output, inventories and input purchases.

In October, the U.S. manufacturing sector contracted for the eighth consecutive month and at a faster pace than the prior month, with the ISM Manufacturing^® PMI decreasing to 48.7% from 49.1% in September. On the other hand, all of the four demand indicators (New Orders, New Export Orders, Backlog of Orders and Customers’ Inventories) improved in October but are still in contraction territory. Meanwhile, the Production Index returned to contraction after growing in September, decreasing from 51% to 48.2%.

The New Orders Index contracted for the second consecutive month but at a slightly slower rate, rising 0.5 percentage points from September. The index hasn’t shown consistent growth since a 24-month streak of expansion ended in May 2022. Of the six-largest manufacturing sectors, one—transportation equipment—reported an increase in new orders. Respondents continued to note concern about near-term demand, primarily driven by tariff costs and uncertainty.

The New Export Orders Index contracted for the eighth consecutive month but at a slower pace, 1.5 percentage points higher than September. The continued contraction is likely indicative of dampened demand amid ongoing trade tensions and policy uncertainty. Meanwhile, the Imports Index contracted for the seventh consecutive month but at a slightly slower rate, up 0.7 percentage points to 45.4% in October. Imports continued to contract as tariff pricing results in lower demand compared to prior months.

The Employment Index contracted for the ninth consecutive month but at a slightly slower pace than the prior month, up 0.7 percentage points from September to 46%. Of the six-largest manufacturing sectors, two—transportation equipment and food, beverage and tobacco products—reported increased employment. Companies continued to focus on layoffs and attrition to restrict headcounts due to uncertainty around near- to mid-term demand. For every comment on hiring, 3.4 respondents noted reduced headcounts.

The Prices Index decreased 3.9 percentage points to 58%, indicating raw materials prices grew for the 13th straight month in October, but at a slower pace. Of the six-largest manufacturing sectors, five—machinery; computer and electronic products; transportation equipment; chemical products; and food, beverage and tobacco products— reported increased prices. The increase continues to be driven by higher steel and aluminum prices impacting the entire supply chain, as well as the tariffs applied to most imported goods. Roughly 27.3% of companies reported paying higher prices, slightly down from 32.5% in September but still up from 21% in January.

The federal Registered Apprenticeship program has the potential to help alleviate some of the manufacturing sector’s labor shortage—but it needs strengthening and streamlining to do so, Manufacturing Institute Chief Program Officer Gardner Carrick told the U.S. Senate Health, Education, Labor and Pensions Committee Wednesday.

What’s going on: “Registered Apprenticeship has an opportunity to play a significant role in the growth and scaling of the apprenticeship model in manufacturing,” Carrick said at the hearing “Registered Apprenticeship: Scaling the Workforce for the Future.” “But the program must be value-added.”

• In July, the MI—the NAM’s 501(c)3 workforce development and education affiliate—released “Manufacturing America’s Talent,” its workforce-system improvement roadmap that includes key recommendations for bettering the federal RA program framework.

FAME gives employers what they need: Apprenticeship works, Carrick said, pointing to the MI’s Federation for Advanced Manufacturing Education (FAME) program as evidence. FAME was started in 2010 by Toyota and is today fully run by the MI.

• But for the RA program to work as well—and help fill the many open manufacturing jobs, forecast to reach 3.8 million by 2033 if current trends continue—the federal government must provide flexibility to allow employers to tailor the program’s offerings to their real-world skill needs.
• The fact that just 15% of FAME participants are registered apprentices is evidence that the current system is not meeting needs, Carrick continued.

What should be done: The RA program “must be employer-led, offer a sensible balance between benefits and costs and support the infrastructure needs of our education partners to deliver the skills and competencies that manufacturers are actually asking for.”

What success looks like: Today, FAME works with nearly 500 companies in 45 locations across 17 states. Its graduates—highly skilled maintenance technicians—have a 95% full-time employment rate.

• One study shows that five years after finishing the program, FAME graduates were earning just under six figures annually, Carrick said.
• “In FAME, we achieve these levels of success because the model is employer-led, which means we teach the skills that employers actually demand.”

Read the whole thing: You can read Carrick’s full written testimony here.

Amazon has a new package-sorting robotics system capable of doing the work of three separate stations “in one place,” the retail and technology giant announced recently (CNBC).

What’s going on: “The system, called Blue Jay, is made up of a series of robotic arms that are suspended from a conveyor belt-like track. Those arms are tipped with suction-cup devices that allow them to grab and sort items of varying shapes and sizes.”

The backdrop: The system is the latest in a lineup of robotics Amazon has begun using for an array of tasks, from removing goods from shelves to sorting packages. These investments not only make jobs more efficient, but they also increase safety for employees.

• In May, it unveiled “Vulcan,” a system that has a sense of touch.
• The company’s foray into robotics began in 2012, when it acquired Kiva Systems.

Employee-centered: Amazon, which plans to hire 250,000 workers for full- and part-time roles this holiday season, said “employees remain ‘at the center’ of its robotics development. … [and] its goal is to ‘reduce physically demanding tasks, simplify decisions and open new career opportunities’ for workers.”

Related development: Also recently, the global company unveiled augmented reality glasses for delivery drivers.

• The gadgets, which have been tested by hundreds of drivers, have artificial intelligence, cameras and sensors to scan packages and display hazards, driving directions and reminders.
• The glasses also feature a button drivers can use to call emergency services.

In August, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index recorded a 1.5% annual gain, the weakest annual gain in over two years. The 10-City Composite saw an annual increase of 2.1% in August, down from 2.3% the previous month, while the 20-City Composite rose 1.6% year-over-year, down from 1.8%. Among the 20 cities, New York again posted the highest annual gain at 6.1%, followed by Chicago at 5.9% and Cleveland at 4.7%. Tampa again recorded the lowest annual return, with prices falling 3.3%.

On a month-over-month basis, the U.S. National Index ticked down 0.3% before seasonal adjustment. At the same time, the 10-City and 20-City Composites both decreased 0.6%. After seasonal adjustment, the National Index and the 10-City and 20-City Composites all edged up 0.2%.

The combination of high financing costs and prices remaining near record highs has limited activity. Before seasonal adjustment, all cities except Chicago saw prices drop in August. The Midwest and Northeast markets continued to outperform other regions. Meanwhile, the Sun Belt and Western markets continued declining, including Tampa (down 3.3%), Phoenix (down 1.7%), Miami (down 1.7%), San Francisco (down 1.5%) and Denver (down 0.7%).

Despite high mortgage rates continuing to weigh on buyer demand, it appears the housing market is finding a new equilibrium. Several major markets in decline signal recent appreciation has ended. These adjustments may lead to a more sustainable market in the long run.

Consumer confidence decreased 1.0 point in October to 94.6. Among its components, the Present Situation Index improved while the Expectations Index declined, with consumers’ pessimism about future job availability and future business conditions being partially mitigated by consumers’ views of current job availability improving for the first time since December 2024.

The Present Situation Index, reflecting current business and labor market conditions, increased 1.8 points to 129.3. Meanwhile, the Expectations Index, which reflects consumers’ short-term outlook for income, business and labor market conditions, fell 2.9 points to 71.5, remaining below the recession signal threshold of 80 since February 2025.

Views of the current labor market situation improved, with 27.8% of consumers saying jobs were “plentiful,” up from September (26.9%), while 18.4% said jobs were “hard to get,” slightly higher than September (18.2%) and up from 14.5% in January. Looking to the future, 27.8% anticipate fewer available jobs in the next six months, up from 25.7% the prior month.

Mentions of high prices and inflation continued to top the list of topics influencing consumers’ views of the economy. Meanwhile, mentions of tariffs continued to decline in October but remained elevated. Comments on U.S. politics increased, with the ongoing government shutdown mentioned as a key concern. Consumers’ 12-month inflation expectations inched up from 5.8% to 5.9% in October. Meanwhile, 52.8% of consumers, compared to 51.1% in September, expect interest rates to rise, and a smaller share of consumers (26.2% vs. 26.9% in September) expect rates to fall.

Buying plans for cars increased in October, while buying plans for homes decreased. Consumers’ plans for buying big-ticket items were little changed in October but have started to pick up after weakening earlier this year. Consumers’ intentions to purchase more services rose after September’s pullback, and vacation intentions seem poised for a recovery. Preliminary data suggest consumers’ holiday spending will be down this year. Overall, consumers’ views of their current and future financial situation strengthened from September.

Manufacturing activity in the Fifth District declined in October, but at a slower pace than the previous month, with the composite manufacturing index moving up from -17 to -4. Meanwhile, the local business conditions index increased from -12 in September to -1 in October. Despite improvements in most indicators in October, manufacturers are more pessimistic about the future, with the outlook for future local business conditions falling from -1 in September to -5 in October. The Fifth Federal Reserve District consists of Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia.

Among its components, shipments moved into positive territory, rising from -20 to 4. New orders and employment remained negative but contracted at a slower pace, stepping up to -6 and -10, respectively. The vendor lead time index declined from 10 to 6 in October. Meanwhile, the share of firms reporting backlogs eased, moving from -21 to -16. The average growth rate of prices paid and prices received both fell in October.

Looking ahead, firms still expect both price indexes to increase in the next 12 months, but with both rising at a slower rate than forecasted in September. Expectations for future shipments jumped from 0 to 13, while new orders increased from 8 to 12. Expectations for backlogs worsened, falling from -8 to -12. Meanwhile, firms’ expectations about equipment and software spending remained negative but improved from -9 to -6. Expectations for capital expenditures moved into positive territory, increasing from -11 to 1. In sum, businesses in the Fifth District are somewhat more optimistic about new investment plans while remaining cautious about future business conditions.

In October, Texas factory activity continued to expand and at the same pace as the prior month. The production index was unchanged from September at 5.2, remaining below the average of 9.6. Meanwhile, other measures posted mixed results for the month. The new orders index inched up 0.9 points to -1.7. Capacity utilization fell 5.0 points to -1.1, while shipments declined 0.9 points to 5.8.

Perceptions of manufacturing business conditions remained negative in October, with the general business conditions index stepping up 3.7 points to -5.0. Meanwhile, the outlook also improved but remained negative, with the company outlook index ticking up 0.7 points to -0.3. The uncertainty index jumped 8.3 points to 22.2, well above the series average of 17.2.

Labor market indicators suggest an increase in headcounts but a decline in the workweek in October, with the employment index rising 5.4 points to 2.0 and the hours worked index falling 8.9 points to -5.5. Nearly 18% of firms reported net hiring while a smaller percentage (15.7%) noted net layoffs.

Price and wage pressures eased somewhat in October. The prices paid for raw materials index fell 10.0 points to 33.4. Meanwhile, the prices received for finished goods index declined 4.0 points to 7.7. The wages and benefits index decreased 1.7 points to 14.2, staying below the series average of 21.

The outlook for future manufacturing activity weakened in October, with the future production index falling 10.6 points to 21.0. Meanwhile, the future general business activity index and future company outlook index both stepped down, declining to 7.0 and 7.1, respectively.

The Federal Open Market Committee lowered its interest rate target range by 25 basis points to 3.75%–4.00% at its October meeting. The FOMC also concluded its multiyear reduction of its Treasury holdings but will continue to shrink its holdings of mortgage-backed securities. In a change to its previous statement, the FOMC noted that inflation has moved up some since earlier this year, but available indicators suggest that economic activity continues to expand at a moderate pace. Nonetheless, the committee judged that downside risks to employment warranted an additional cut to its interest rate target. Two FOMC members—Stephen Miran and Jeffrey Schmid—dissented. Miran preferred to lower the target range by 50 basis points, while Schmid preferred to keep the rate steady.

In the press conference following the meeting, Federal Reserve Chairman Jerome Powell noted that the data that have remained available suggest that the outlook for employment and inflation has not changed much since their previous meeting, with conditions in the labor market cooling while inflation remains elevated. Chairman Powell also noted that a further reduction in the policy rate at the December meeting is not a forgone conclusion—“far from it.”

The FOMC’s summary of economic projections, which maps out the Federal Reserve’s expectations for where interest rates may be headed in the future, generally is released in conjunction with every other FOMC meeting. Since the September meeting included a release of economic projections, there was not a release in conjunction with the October FOMC meeting. The September summary signaled a more dovish stance than the June summary. Although nine Federal Reserve officials projected an additional 50 basis points worth of cuts in that projection, implying the likelihood of a December cut, Chairman Powell expressed that policymakers now bring “strongly different views about how to proceed.”

Every day that the government remains closed is another day “the American people suffer new losses, and businesses remain stuck in neutral”—so Congress must end the shutdown now, the NAM and its official state partners told Senate and House leaders on Tuesday. 

What’s going on: “An open and fully functioning government is essential to the growth of the American economy, the success of manufacturers across the country and the well-being of our communities,” the NAM and more than 30 of its state manufacturing association partners explained to Senate Majority Leader John Thune (R-SD), House Majority Leader Steve Scalise (R-LA), Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Hakeem Jeffries (D-NY). 

• “When the government is shuttered, it stifles our ability to invest in our communities and our people. And it diminishes faith in our institutions.”  

The impact: The shutdown, which entered its 29th day on Wednesday, has furloughed hundreds of thousands of federal workers and halted critical safety inspections of new power plants and manufacturing facilities. 

•  Life-sustaining products aren’t getting to Americans who need them, and desperately needed new power sources aren’t being added to the grid, the groups continued. 

• Furthermore, “[p]ermitting becomes next to impossible, and housing projects, retail construction, data centers, manufacturing production lines, infrastructure projects and other job-creating investments cannot break ground.” 

What must be done—immediately: The government must reopen “without further delay, and a clean continuing resolution is the swiftest and most effective way to achieve that,” the organizations told the congressional leaders. 

Driving the news: In an exclusive to Fox Business, who covered the letter, NAM President and CEO Jay Timmons laid it out plainly:  

• “Every day the government is closed, job-creating projects are stalled, supply chains are disrupted, permits halted, product approvals and facility inspections are delayed and safety approvals on which American families rely are put on hold.  

• White House Deputy Press Secretary Abigail Jackson also amplified the Fox Business story on X.