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In November, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index recorded a 1.4% annual gain, consistent with the gain in October. The 10-City Composite increased 2.0%, up from 1.9% the previous month, while the 20-City Composite rose 1.4% year-over-year, up from 1.3%. Among the 20 cities, Chicago posted the highest annual gain at 5.7%, followed by New York at 5.0% and Cleveland at 3.4%. Tampa again posted the lowest annual return, with prices falling 3.9%.

On a month-over-month basis, the U.S. National Index declined 0.1% before seasonal adjustment. At the same time, the 10-City Composite inched up 0.1%, while the 20-City Composite edged down less than 0.1%. After seasonal adjustment, the U.S. National Index rose 0.4%, while the 10-City and 20-City Composites both grew 0.5%.

The combination of high financing costs and prices continue to cap growth. Before seasonal adjustment, 15 of the 20 major metro areas saw price declines in November. The Northeast and Midwest continue to outperform other regions as overall conditions cool. Meanwhile, in addition to Tampa, the Sun Belt and Western markets continue declining, including Phoenix (down 1.4%), Dallas (down 1.4%) and Miami (down 1.0%).

Any short-term momentum from last year has slowed across regions. Home price gains continue to trail inflation, weakening home values over the past year. The new equilibrium of minimal price growth and elevated costs is leaving home values essentially flat in real terms.

As anticipated, the Federal Open Market Committee maintained its interest rate target range at 3.50%–3.75% at its January meeting. In a change to its previous statement, the FOMC noted that economic activity has been expanding at a solid pace, while the unemployment rate has shown signs of stabilization, no longer necessitating a rate cut. On the other hand, two FOMC members—Stephen Miran and Christopher Waller—dissented, preferring to lower the target range by 25 basis points. In addition, at its annual organization meeting, the FOMC reaffirmed its “Statement on Longer-Run Goals and Monetary Policy Strategy,” which articulates its approach to monetary policy. The statement is identical to the version adopted in August 2025.

In the press conference following the meeting, Federal Reserve Chairman Jerome Powell noted that the economy goes into 2026 on a firm footing, with job gains staying low while inflation remains elevated. Chairman Powell noted that the FOMC is well positioned to determine the extent and timing of additional adjustments to its policy stance. In addition, the improved outlook for economic activity should have a positive impact on labor demand and employment.

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 December meeting included a release of economic projections, there was not a release in conjunction with the January FOMC meeting. The December summary signaled a mixed stance regarding where monetary policy should go in 2026. Twelve Federal Reserve officials projected additional rate cuts across 2026, while four anticipated no additional rate cuts, and three predicted a 25-basis-point hike.

The Producer Price Index for final demand (also known as wholesale prices) rose 0.5% over the month in December, after prices ticked up 0.2% in November. Over the year, producer prices moved up 3.0% in December, unchanged from November. Meanwhile, prices for final demand excluding foods, energy and trade services increased 0.4% over the month in December after rising 0.2% in November. Prices for these goods advanced 3.5% from December 2024.

Within final demand, prices for services jumped 0.7% in December after staying the same in November. Meanwhile, prices for goods stayed the same in December, after rising 0.8% in November. Within the final demand services index, margins for machinery and vehicle wholesaling moved up 4.5%, accounting for more than 40% of the December increase. Within the final demand goods index, prices for nonferrous metals climbed 4.5%, while prices for diesel fuel fell 14.6%.

Processed goods for intermediate demand inched down 0.1% in December, following a 0.5% increase in November. The decrease was driven by a 2.4% decline in the index for processed energy goods, in particular the drop in prices for diesel fuel. On the other hand, the index for processed materials less foods and energy advanced 0.7%. Over the year, the index rose 3.4% after a 0.1% increase in December 2024.

Meanwhile, prices for unprocessed goods for intermediate demand grew 2.3% in December, the largest increase since January 2025, after moving up 0.5% in November. The gain was led by a 34.8% jump in the index for natural gas. At the same time, prices for slaughter hogs declined 10.1%. Over the year, prices for unprocessed goods for intermediate demand decreased 0.3% after moving up the same amount in November.

Manufacturing activity in the Fifth District contracted in January, but at a slightly slower pace than the previous month, with the composite manufacturing index inching up from -7 to -6. At the same time, the local business conditions index improved from -9 in December to -8 in January. Despite current weakness, manufacturers are more optimistic about the future, with the outlook for future local business conditions rising from 16 in December to 19 in January. The Fifth District consists of Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia.

Among its components, shipments remained negative but contracted at a slower pace, increasing from -11 to -5. New orders improved slightly, ticking up from -8 to -6 in January. Employment worsened, falling from -1 to -6, and the vendor lead time index declined from 9 to 0. Meanwhile, the share of firms reporting backlogs worsened, decreasing from -7 to -13. The average growth rate of prices paid quickened, while average growth of prices received slowed in January.

Looking ahead, firms expect both price indexes to increase in the next 12 months, with both rising at a slightly faster pace than forecasted in December. Expectations for future shipments climbed from 28 to 34, while new orders increased from 27 to 36. Expectations for backlogs inched down from 5 to 4. Meanwhile, firms’ expectations about equipment and software spending turned negative, declining from 0 to -3. At the same time, expectations for capital expenditures improved but remained negative, increasing from -6 to -4. In sum, businesses in the Fifth District remain optimistic about future business conditions but pessimistic about future investment plans.

In January, Texas factory activity expanded notably after contracting the prior month. The production index increased from -3.0 to 11.2, moving above the series average of 9.6. The new orders and capacity utilization indexes also turned positive, rising 18.4 points to 11.8 and 11.7 points to 7.1, respectively. Meanwhile, shipments jumped 22.5 points to 12.0. The Eleventh District consists of all of Texas, northern Louisiana and southern New Mexico.

Consistent with the growth seen across indexes in January, perceptions of manufacturing business conditions strengthened, with the general business activity index increasing 10.1 points to -1.2. At the same time, the company outlook index rose 15.2 points to 2.9. On the other hand, the uncertainty index moved up 4.8 points from 0.0, remaining below the series average of 16.9.

Labor market indicators suggest strong growth in headcounts but almost no change in the workweek in January, with the employment index rising 9.6 points to 8.2 and the hours worked index stepping up 8.5 points to 0.7. Nearly 21.5% of firms reported net hiring, while a smaller percentage (13.3%) noted net layoffs.

Price pressures accelerated while wage pressures weakened in January. The prices paid for raw materials index inched up 1.9 points to 37.1. Meanwhile, the prices received for finished goods index jumped 9.7 points to 18.5, more than double the series average. The wage and benefits index decreased 4.3 points to 17.4, staying below the series average of 20.9.

The outlook for future manufacturing strengthened in January, despite the future production index declining 3.7 points to 29.2. Moreover, the future general business activity index and future company outlook index both moved up, increasing to 16.6 and 23.2, respectively.

New orders for manufactured goods increased 2.7% in November, following a 1.2% decline in October. Meanwhile, new orders for manufactured goods grew 3.4% over the year. When excluding transportation, new orders inched up 0.2% over the month and 0.7% year-over-year in November. Orders for durable goods jumped 5.3%, following a 2.1% decrease in October. Year to date, durable goods orders rose 7.3%. Nondurable goods orders stayed the same in November after declining 0.3% in October. Nondurable goods orders edged down 0.3% over the year.

New orders for nondefense aircraft and parts led the increase in durable goods orders, surging 97.6%, following October’s 17.9% drop. In November, the largest monthly decrease occurred in defense search and navigation equipment, which fell 9.7% after increasing 2.5% the prior month. The largest over-the-year changes occurred in nondefense aircraft and parts (up 111.8%) and mining, oil field and gas field machinery (down 6.8%).

Factory shipments declined 0.1% in November, after ticking up 0.1% in October. Shipments over the year rose 1.5%. Shipments excluding transportation increased 0.2% in November, following a 0.1% decrease the previous month. Shipments for durable goods dropped 0.3% in November, following a 0.5% rise in October, and are up 3.3% year to date. Meanwhile, nondurable goods shipments stayed the same after moving down 0.3% the prior month, and are down the same amount year to date.

Unfilled orders for all manufacturing industries increased 1.4% in November, after inching up 0.2% in October. Unfilled orders over the year jumped 9.4%. Inventories rose 1.1% year-over-year. The inventories-to-shipments ratio remained unchanged at 1.56 in November. The unfilled orders-to-shipments ratio for durable goods moved up to 7.04 in November from 6.93 in October.

The NAM continues its full-court press for comprehensive, bipartisan permitting reform on Capitol Hill, urging the leaders of the Senate Committee on Environment and Public Works to consider manufacturers’ key priorities ahead of a hearing on environmental review and permitting processes. 

• “Manufacturers strongly support getting permitting reform done this year to provide clarity across all types of investments that will grow jobs here at home and ensure America continues to compete and lead on the world stage.” 

Building on House momentum: The NAM ramped up its decades-long effort to secure permitting reform at the end of last year and is keeping its momentum going after promising results in the House in mid-December. Now it is urging the Senate to follow suit on these key issues:   

1. Reforming the National Environmental Policy Act: The NEPA process is often used in ways not intended by Congress—leading to significant delays and uncertainty for manufacturers. The NAM supports expediting judicial review with workable statute of limitations and guardrails on judicial vacatur, expanding categorical exclusions, codifying Supreme Court precedent to ensure NEPA’s scope is focused appropriately on proximate and project-specific impacts and ensuring there are enforceable statutory deadlines for agencies.  
2. Clarifying what triggers a federal action: Federal incentives should expedite manufacturing projects, not slow them down. Manufacturers believe that the NEPA process should not be triggered automatically by the grant of federal financial support, but rather depend on an analysis of the potential impacts of a project. 
3. Modernizing the Clean Air Act: Manufacturers support a modernized National Ambient Air Quality Standards process and review cycle, allowing for expanded emissions credit trading, discounting emissions from international and exceptional event sources, like wildfires and wildfire-mitigation efforts, when setting compliance burdens and right-sizing the New Source Review program to allow projects to get shovels in the ground quicker before installing emitting equipment.  
4. Streamlining the Clean Water Act: Policymakers should clarify timelines for when agencies must act on permitting requests, establish clear, commonsense definitions regarding the scope of permitting and consultation requirements and increase the use of general permits.  
5. Providing greater certainty to lawfully permitted projects: Manufacturers should also receive statutorily equal protection for permits of all types, so they can plan and invest over the long term. Policymakers should use oversight authority to ensure federal agencies are coordinating fully during permitting and a lead agency is always designated.   
6. Accelerating energy infrastructure buildout: With demand for energy skyrocketing, U.S. infrastructure must be upgraded and expanded. The NAM supports modernizing the permitting and safety processes for pipelines and ensuring federal coordination with states and localities as they install new electric transmission and distribution lines.  
7. Unlocking access to domestic critical materials: Lawmakers should ensure that any comprehensive permitting deal will expedite the approval of critical minerals and materials projects, including aligning the Department of Energy’s Critical Materials and the Department of the Interior’s Critical Minerals Lists.   

The last word: “Manufacturers in America create family-supporting jobs in communities across the country, drive innovation, power economic growth and develop and deploy technologies to make our environment cleaner,” said NAM Vice President of Domestic Policy Chris Phalen. 

• “This Congress has made it clear that new policies are needed to ensure the United States becomes the destination of choice for new manufacturing investment so that our nation can maintain our leadership in creating new technologies and products that make lives better for people around the world.” 

Ahead of two hearings focused on health care affordability, the NAM laid out manufacturers’ policy solutions to reduce health care costs for manufacturers, their workers and their families.

The hearings: The House Committee on Ways and Means and the House Energy and Commerce Subcommittee on Health each held a hearing with the CEOs of major health insurance companies as witnesses on Jan. 22. House Ways and Means Committee Chair Jason Smith (R-MO) summed up the reason for the hearings in his opening statement, stating, “patients are forced to navigate systems designed around insurer priorities, not patient needs.”

Why manufacturers care: Seventy percent of manufacturers cited health care and insurance costs as a primary business concern in the NAM’s most recent Manufacturers’ Outlook Survey.

• Ninety-four percent of manufacturers also said that they expected, or had already seen, an increase in health insurance premiums for 2026. Of those, 11% see premiums rising by more than 20%, an unsustainable increase that neither manufacturers nor manufacturing workers and their families can afford.

What’s needed: To address the steep and sustained increase in health care costs, the NAM recommended that policymakers focus on certain reforms, including the following:

• PBM reform: Pharmacy benefit managers, the unregulated middlemen that negotiate and administer drug benefits for health insurance companies and self-funded employer plans, have long driven up the costs of medicine by pocketing manufacturers’ rebates and engaging in other questionable business practices. Necessary reforms include increasing transparency requirements, delinking PBM compensation from the list price of medicines and instituting full rebate passthrough to plans and their beneficiaries in the commercial market. PBM reforms were included in the House-passed government funding bill, which awaits consideration in the Senate.
• 340B program reform: The 340B program was created to lower costs for underserved and low-income patients, but has expanded far beyond Congress’ intent. The 340B program allows certain hospitals and clinics to buy drugs at lower prices, but when patients with health insurance through their employer receive those drugs, their insurance is charged the full price and patients and employers lose out on negotiated rebates. Reforms are needed to return the program to Congress’ original intent and put more money in the pockets of manufacturers.
• HSA expansion: Congress should consider expanding eligibility and contribution limits for health savings accounts, tax-free savings accounts that patients with certain health insurance plans can use to pay for out-of-pocket medical costs. Expanding eligibility and contribution limits for HSAs would help more Americans pay their out-of-pocket health care costs tax-free.

Other recommendations: The NAM also recommended ways to help manufacturers continue to offer health benefits to their workers, including incentivizing the adoption of individual coverage health reimbursement arrangements (which allow employers to make tax-free reimbursements to employees for qualified medical expenses without providing traditional group health insurance), codifying association health plans (which allow small employers to join together to offer employer-sponsored health plans at lower costs than they could individually) and improving data transparency and accessibility for employer plan sponsors.

• The NAM also urged policymakers to strengthen the Employee Retirement Income Security Act of 1974 and protect its federal preemption so manufacturers can continue to provide consistent, yet tailored, benefits across many states.

The last word: “Manufacturers and their workers are increasingly concerned with the rising cost of health care,” said NAM Director of Health Care Policy Jess Wysocky and NAM Vice President of Domestic Policy Jake Kuhns. “Congress must act to reduce health care costs so that manufacturers can continue to offer health insurance to their workers, and their families, who work hard every day to power the American economy.”

The U.S. government is putting $1.6 billion behind USA Rare Earth, the company announced this week, as part of a broader push to strengthen domestic critical supply chains and reduce reliance on China (The Wall Street Journal, subscription).

What’s going on: USA Rare Earth “said Monday that the nonbinding letter of intent from the Commerce Department’s CHIPS Program would cover a proposed $1.3 billion senior secured loan, alongside $277 million in proposed federal funding.”

• Under the agreement—part of the administration’s effort to build a stronger domestic rare-earths supply chain—the company will give the Commerce Department 16.1 million shares and approximately 17.6 million warrants.
• The news follows the announcement in November that rare-earth magnets company Vulcan Elements received a $620 million Defense Department loan, along with $50 million from the Commerce Department.
• The U.S. government has also taken stakes in rare-earths miner MP Materials.

Why it’s crucial: “The flurry of investment follows China restricting its rare-earth exports in April, putting pressure on the government and U.S. businesses to meet mineral demand from defense contractors and other manufacturers.”

Well-positioned: USA Rare Earth has raised an additional $1.5 billion in private investment, it said.

• It’s also signed a letter of intent with the Energy Department’s National Energy Technology Laboratory, under which the lab will help it develop “digital twin technology to improve the company’s rare-earth elements separation processes.”

The Manufacturing Institute—the workforce development and education affiliate of the NAM—is launching a new chapter of the Federation for Advanced Manufacturing Education (FAME USA) in partnership with Grow Quad Cities and Eastern Iowa Community Colleges.

• FAME USA, which was founded by Toyota and is now led by the MI, is an employer-led solution that provides global-best workforce development through strong technical training, integration of manufacturing core competencies, intensive professional practices and intentional hands-on experience.

How it works: The new two-year apprenticeship-style training program at EICC—the product of two years of research by the MI and partners into local workforce needs—will allow students to earn while they learn to become highly skilled advanced maintenance technicians.

• Students spend two days a week in the classroom and three days a week with a sponsoring employer to get hands-on experience on the shop floor. At the end of their two years, they will have accrued over 2,000 hours of hands-on training and earned an associate degree in industrial maintenance.
• The new IA FAME – Riverbend chapter will be housed at EICC’s Blong Technology Center in partnership with Grow Quad Cities and seven local manufacturing companies: Amcor Global Rigid Packaging Solutions, LMT Defense, Novelis, Oertel Metal Works, PCT Ebeam and Integration, Smith Filter and SSAB.
• “Riverbend FAME expands what’s possible for students,” said EICC Chancellor Bryan Renfro. “It gives them a direct pathway to industry experience, job-ready training and long-term career success in manufacturing.”

Why it matters: Grow Quad Cities’ annual  Top 100 High-Priority Jobs Report, released in August 2025, shows high local demand for industrial machinery mechanics, machinists and mobile heavy equipment mechanics—roles for which FAME graduates are perfectly suited.

• “We’ve been thoughtfully listening to what our local manufacturers need when it comes to future workforce,” said Grow Quad Cities Vice President, Business Retention & Expansion, Workforce Chris Caves. “And we know the need for maintenance talent in the region is growing due to an aging population of maintenance staff. FAME has been adopted positively by global manufacturing companies for the past 15 years, and we’re ready to demonstrate that the Quad Cities is serious about developing manufacturing professionals to satisfy this occupational need that will only grow in the years to come.”
• With support from the Arconic Foundation, the MI advanced its FAME efforts by partnering with Grow Quad Cities to convene local employers and launch the newest FAME chapter, strengthening workforce development for the Quad Cities’ robust manufacturing community.

Critical support: The new chapter was made possible thanks to grants from the Arconic Foundation.

• “The newly established FAME chapter serving the Quad Cities region will open new paths to great careers in manufacturing for local students,” said Arconic Foundation President and Treasurer Ryan Kish. “Arconic Foundation is proud to invest in this proven model to help prepare the next generation of manufacturing workers in the community.”

FAME spreads: IA FAME – Riverbend is the first FAME chapter in Iowa, expanding FAME USA’s footprint to 17 states, with 45 locations nationwide.

• As of 2025, six years after the MI took over responsibility for the initiative, FAME has brought together nearly 500 companies employing more than 1,200 students annually with 2,700 graduates and growing.
• FAME USA National Director Tony Davis said, “This chapter is really a great example of perseverance and engagement from local manufacturers, supported by great community groups and with a commitment to serve the needs of manufacturers by the college.”

What’s next: The first cohort of 10 students will start in fall 2026 and will graduate ready to join the manufacturing workforce full time in spring 2028.

Get involved: To learn more about FAME and starting a chapter, go here.

Photo of EICC Chancellor Bryan Renfro, credit EICC