Input Stories

Consumer prices increased 0.2% over the month and 2.3% over the year in April, slowing from the 2.4% rise in March to the slowest over-the-year increase in more than four years. Core CPI, which excludes more volatile energy and food prices, edged up 0.2% over the month and rose 2.8% over the year, the same as the 12-month increase in March.

Energy costs increased 0.7% over the month in April, driven by a 3.7% hike in the utility (piped) gas service index, but fell 3.7% over the year. On the other hand, the rise in the utility (piped) gas service index was offset partially by an over-the-month decrease in the index for fuel oil (down 1.3%).

Food prices dipped slightly in April, falling 0.1% over the month, driven primarily by a 12.7% decrease in the index for eggs, but were still up 2.8% over the year in April. The food at home index fell 0.4% from March, the largest decline in that index since September 2020, but increased 2.0% from April 2024. Meanwhile, food away from home rose 0.4% in April and 3.9% over the year.

Shelter grew 0.3% over the month and 4.0% over the year, consistent with the 12-month increase in March. Meanwhile, prices for transportation services edged up 0.1% over the month and rose 2.5% over the year, with motor vehicle insurance and motor vehicle maintenance and repair leading the increase, surging 6.4% and 5.6% over the year, respectively. On the other hand, airline fares declined 2.8% over the month and 7.9% over the year, partially offsetting some of the increase in the transportation services index.

Although the over-the-year headline inflation rate continues to tick down, risks of higher inflation have risen. In the press conference following the May meeting, Federal Reserve Chairman Jerome Powell indicated that the Federal Open Market Committee will keep its policy stance consistent until notable changes to inflation or the labor market are seen in the data. Therefore, markets are anticipating that the FOMC will keep rates steady at its meeting in June.

Industrial production was unchanged in April. Meanwhile, manufacturing output dipped 0.4%. Growth in wood products; aerospace and miscellaneous transportation equipment; fabricated metal products; and furniture and related products was more than offset by declines in most other major categories, particularly nonmetallic mineral products; motor vehicles and parts; and apparel and leather. At 103.9% of its 2017 average, total industrial production in April rose 1.5% from the same month last year. Capacity utilization slipped to 77.7%, down 0.1 percentage point from March, but increased 1.4% over the past year. Capacity remains 1.9 percentage points below its long-term average from 1972 to 2024.

In April, major market groups had mixed growth. Among consumer goods, the production of durables decreased 1.3%, with declines in every major category, while the index for nondurables inched up 0.1%, with the greatest improvement in energy goods (3.2%). The business equipment index advanced 0.2% in April, driven by a 0.9% increase in industrial and other business equipment.

Durable goods manufacturing fell 0.2% in April, with a decline in motor vehicles and parts (-1.9%) partially offset by an increase in wood products (1.3%). Meanwhile, nondurable goods manufacturing decreased 0.6% in April. Manufacturing capacity utilization fell 0.4 percentage points to 76.8% and remains 1.4 percentage points below the long-term average.

Real GDP decreased at an annual rate of 0.3% in the first quarter of 2025, down from a 2.4% increase in the fourth quarter of 2024 and below consensus expectations of meager growth. The decrease in GDP during the quarter was mostly reflective of an increase in imports, which are a subtraction in the calculation of GDP, and a decline in government spending. This was partially offset by greater investment, consumer spending and exports. Since, by definition, GDP measures domestic output, imports are subtracted from the final calculation since they are reflected in other parts of the equation, such as inventories and consumption.

Consumer spending grew at an annual rate of 1.8%, down from a 4.0% increase in the fourth quarter, with both spending on goods (up 0.5%) and services (up 2.4%) contributing to the gain. Consumer spending on durable goods decreased 3.4% after exhibiting significant growth of 12.4% in the fourth quarter. The decline in consumer spending was led by motor vehicles and parts, with a slight decline in other durable goods. Meanwhile, consumer spending on nondurable goods rose 2.7%, down from 3.1% growth in the fourth quarter. Within services, spending increases were widespread, with health care, housing and utilities being the largest contributors to the increase. The decrease in federal government spending (down 5.1%) was led by an 8.0% decline in defense spending, but nondefense spending was also down 1.0%.

Investment surged 21.9% at an annual rate in the first quarter, driven by a 22.5% increase in business spending on equipment, with information processing equipment being the largest contributor. Meanwhile, business spending on industrial equipment declined. Exports rose 1.8% in the first quarter, with the increase entirely concentrated in goods exports.

In February, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index recorded a 3.9% annual gain, down slightly from 4.1% in January. The 10-City Composite saw an annual increase of 5.2% in February, down from 5.4% the previous month, while the 20-City Composite rose 4.5% year-over-year, down from 4.7%. Among the 20 cities, New York again posted the highest annual gain at 7.7%, followed by Chicago at 7.0% and Cleveland at 6.6%. Tampa again exhibited the lowest annual return, with prices falling 1.5%.

On a month-over-month basis, the U.S. National Index rose 0.4%, the 10-City Composite improved 0.8% and the 20-City Composite increased 0.7% before seasonal adjustment. Meanwhile, after seasonal adjustment, the 10-City and 20-City Composites posted increases of 0.5% and 0.4%, respectively, while the U.S. National Index improved 0.3%. Of the cities tracked by the 20-City Composite Index, 17 showed monthly price increases, a reversal of recent seasonal weakness. San Francisco (+1.8%), Seattle (+1.6%) and Los Angeles (+1.5%) led monthly price gains, while only Tampa (-0.3%) and Miami (-0.3%) exhibited monthly declines.

Even as mortgage rates have slipped from their peaks to the mid-6% range, affordability continues to be a challenge, with the monthly payment burden remaining historically elevated relative to incomes. Consequently, buyer demand has cooled compared to peaks in recent years, but limited housing supply continues to support price growth—resulting in slower, more sustainable price increases rather than broad declines.

Consumer confidence declined 7.9 points in April to 86.0. The Consumer Confidence Index fell for the fifth consecutive month to levels not seen since the onset of the pandemic, driven mainly by consumers’ expectations.

The Present Situation Index, reflecting current business and labor market conditions, fell 0.9 points to 133.5. Meanwhile, the Expectations Index, which reflects consumers’ short-term outlook for income, business and labor market conditions, dropped 12.5 points to 54.4, the lowest level since October 2011 and well below the recession signal threshold of 80.

All components of the Consumer Confidence Index declined sharply, exhibiting pervasive pessimism about the future. Views of the current labor market situation softened, with 31.7% of consumers saying jobs were “plentiful,” down from 33.6% in March, while 16.6% said jobs were “hard to get,” up from 16.1%. Looking to the future, 32.1% anticipate there will be fewer available jobs in the next six months, nearly as high as April 2009 in the middle of the Great Recession. Additionally, expectations about future income turned negative for the first time in five years, with 18.2% of respondents anticipating decreases.

Although April’s drop in confidence was broad-based across age and income groups, the decline was steepest for consumers between the ages of 35 and 55 and among consumers in households earning more than $125,000 a year. Inflation expectations likewise ticked up to 7.0% in April, the highest since November 2022. Meanwhile, expectations for higher interest rates continued to rise. Consumers’ views of their current financial situation softened from March to the lowest level since 2022, while expectations for a recession in the next 12 months increased to a two-year high.

Consequently, buying plans for homes and cars declined, as did vacation plans. Plans to buy big-ticket items also lowered but remained slightly elevated on a six-month moving average. Mentions of trade and tariffs in written responses reached an all-time high. Respondents also mentioned the impact of the high cost of living, stock prices and uncertainty.

In April, Texas factory activity rose, but at a slightly slower pace than the prior month. The production index slipped 0.9 points to 5.1, still indicating modest positive output growth. On the other hand, the new orders index plummeted nearly 20 points to -20.0, after March’s reading of -0.1. The capacity utilization index dropped to -3.8 from -2.3, while the shipments index turned negative for the first time this year, dropping from 6.1 to -5.5.

Perceptions of manufacturing business conditions worsened in April, with the general business activity index plunging more than 19 points to -35.8, the lowest reading since May 2020. The company outlook index fell more than 17 points to its post-pandemic low of -28.3. Meanwhile, the outlook uncertainty index, which has been volatile in previous months, increased again in April, rising nearly 11 points to 47.1. The series average is 17.3.

Labor market indicators suggested a decrease in head counts and shorter workweeks in April, with the employment index inching up to -3.9, while the hours worked index decreased to -6.4. Just more than 9% of firms reported net hiring, and a larger percentage (13.0%) noted net layoffs.

Upward pressure on prices intensified in April, while wage growth remained relatively stable. The prices paid for raw materials index jumped from 37.7 to 48.4, the highest reading since mid-2022. Meanwhile, the prices paid for finished goods index increased from 6.3 to 14.9. The wages and benefits index edged down from 16.0 to 14.3, below the series average of 21.1.

The outlook for future manufacturing activity is still positive, but less optimistic than March’s reading, with the future production index decreasing from 27.6 to 14.8. On the other hand, the future general business activity index fell nearly 9 points to -15.2, and the future company outlook index turned negative, falling 10.2 points to -6.0.

New orders for manufactured goods rose 4.3% in March, up for three consecutive months. When excluding transportation, new orders slipped 0.2%. Orders for durable goods jumped 9.2%, following a 0.8% increase in February. Year to date, durable goods orders are up 5.5%. Nondurable goods orders ticked down 0.3% in March after increasing 0.1% in February. Nondurable goods orders are up 0.8% over the year.

New orders for nondefense aircraft and parts led the increase in durable goods by leaping 139.0%, after shrinking 7.4% in February. In March, the largest monthly decrease occurred in mining, oil field and gas field machinery, which declined 16.3%, after rising 11.7% the month prior. The largest over-the-year changes also occurred in nondefense aircraft and parts (up 99.3%) and ships and boats (down 19.2%).

Factory shipments decreased 0.1% in March, after rising 0.7% in February. Shipments over the year increased 1.6%. Shipments excluding transportation were flat in March, following a 0.4% increase the previous month. Shipments for durable goods improved 0.1% in March, down from 1.3% in February but up 2.4% year to date. Meanwhile, nondurable goods shipments declined 0.3% in March but are up 0.8% year to date.

Unfilled orders for all manufacturing industries rose 2.0% in March, following a 0.1% increase in February. Inventories rose 0.1%, the same as the past three months, and the inventories-to-shipments ratio remained the same at 1.45. The unfilled orders-to-shipments ratio for durable goods increased to 6.98 from 6.81 in February.

The S&P Global U.S. Manufacturing PMI was 50.2 in April, the same as March, signaling marginal growth. Production declined for a second month in a row but at a slower pace than the prior month. Supported by domestic demand, new orders grew for the fourth month in a row, but at the lowest rate this year, dragged down by declines in new export orders. Additionally, optimism fell to its lowest reading since June, and employment fell for the first time in six months.

Tariffs led to steep increases in both input and output costs, with output costs rising at the fastest pace in more than two years. Input prices rose at a slightly slower pace than in March, when prices rose at the highest rate since August 2022. Although some firms reported beneficial tariff-related switching to domestic suppliers to avoid import tariffs, any sales increase was countered by tariff-related worries over supply chains and lost export sales.

Additionally, tariffs are leading to supply-side disruptions, with the seventh straight month of lengthening lead times and the second consecutive month of reduced stocks of purchases. Meanwhile, stocks of finished goods declined at the greatest rate this year and for the fifth consecutive month, likely due to firms modifying their sales forecasts and inventories downward. Firms are also adjusting employment plans, which fell for the first time since October, by choosing not to fill open positions.

In April, the global manufacturing activity contracted after three consecutive months of growth, falling to 49.8 from 50.3. Three of the five PMI components—new orders, employment and stocks of purchases—signaled contraction. While output and delivery times improved, global trade conditions worsened and optimism slumped to a two-and-a-half-year low. Companies cited concerns about tariffs and protectionism impacting new orders, supply chains and pricing.

India, Greece and the Philippines had the highest PMI readings in April, while the Eurozone and China’s PMI also registered expansions. On the other hand, Japan and the U.S. were two of the larger nations to record contractions, while the U.K. showed the steepest decline. New orders fell for the first time this year, with new export orders suffering its steepest decrease since August 2023. Of the 28 nations included in the report, all but three—Germany, India and Greece—showed declines in new export orders. Output rose slightly in both the consumer and intermediate goods industries but was unchanged for investment goods producers.

Additionally, manufacturing employment fell for the ninth consecutive month in April and at the fastest rate since January. Staffing levels sank notably in China, the U.S., the Eurozone and the U.K. These cuts stemmed from a higher cost environment, as both input and output prices increased, with output prices hitting a 25-month high.

Job openings for manufacturing ticked up by 4,000, from 445,000 in February to 449,000 in March. However, the February job openings level of 445,000 was revised downward dramatically from 482,000 in the previous report. Durable goods job openings in March stayed the same at 313,000, while nondurable goods job openings increased by 5,000, from 131,000 in February to 136,000 in March. The manufacturing job openings rate stayed the same at 3.4% in March and decreased from 3.8% the previous year. The rate for durable goods manufacturing similarly stayed the same at 3.8%, while it ticked up 0.1% to 2.7% for nondurable goods.

In the larger economy, the number of job openings fell to 7.2 million, a decrease of 288,000 from the previous month and 901,000 from the previous year. The job openings rate declined to 4.3%, down from 4.5% in February and from 4.9% last year. This data reflects an overall labor market that has eased back to pre-pandemic levels, but remains relatively tight from a historical perspective.

The number of hires in the overall economy increased 41,000 to 5.4 million in March but dropped 61,000 from the previous year. The hires rate for the overall economy stayed the same in March at 3.4%. Meanwhile, the hires rate for manufacturing stayed the same at 2.5% from February. The hires rate for durable goods edged down 0.1% to 2.3%, but ticked up 0.2% to 2.8% for nondurable goods.

In the larger economy, total separations, which include quits, layoffs, discharges and other separations, fell 179,000 from February to 5.1 million and dropped 131,000 from the previous year. The total separations rate edged down 0.1% to 3.2% for the overall economy and also ticked down 0.1% for manufacturing to 2.4%. Within that rate, layoffs and discharges declined by 15,000 in March for manufacturing, while quits increased by 4,000. The quit and layoff rates continue to remain lower for manufacturing than the total nonfarm sector.