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“[T]he next phase of our plan to deliver the greatest economy is for this Congress to pass tax cuts for everybody,” President Trump said last night, reiterating the importance of this key manufacturing policy priority. “They’re in there. They’re waiting for you to vote,” he said.

The urgency: Even before price pressures from tariffs, the NAM’s study with EY showed that failing to act now could cost the U.S. 6 million jobs—including more than 1.1 million in manufacturing.

• In addition, approximately $540 billion in employee wages will be lost, and U.S. GDP will be reduced by $1.1 trillion.

The NAM says: “When President Trump signed these tax cuts into law, it was rocket fuel for manufacturing in America and made the U.S. economy more competitive on a global scale,” said Timmons last night. “That fuel is about to run out as key provisions have expired, and others are about to lapse. …We must ensure these historic, pro-growth manufacturing provisions are made permanent and even more competitive so manufacturers can plan, grow and succeed.”

• “Manufacturers need a deal now as they make decisions for investments in 2026 and beyond,” NAM Executive Vice President Erin Streeter said. “Every day we delay costs investments, jobs and opportunity.”

Making the case: Since igniting the sprint toward a tax deal with House Speaker Mike Johnson (R-LA), House Majority Leader Steve Scalise (R-LA), House Ways and Means Committee Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Mike Crapo (R-ID) at the Capitol in January, the NAM has kept the pressure on lawmakers.

• Yesterday during the president’s address to Congress, the NAM leveraged a new tax ad, “When Manufacturing Wins, America Wins,” to amplify its message even further.

Federal prosecutors have been ordered to prioritize the prosecution of “immigration-related violations,” according to a recent memo from U.S. Attorney General Pam Bondi to all Justice Department employees.
 
What’s going on: The memo, sent Feb. 5, tasks U.S. Attorneys’ Offices across the U.S. with using “all available criminal statutes to combat the flood of illegal immigration … and to continue to support the Department of Homeland Security’s immigration and removal initiatives.” The offices are also required to track and report immigration-related cases and convictions.   
 
What it means: Under the new policy, employers that knowingly hire foreign workers who lack work authorization will face heightened risks of criminal prosecution.

• There will also be more criminal investigations into employers found to have committed workplace immigration violations, even unintentional ones.
• Companies that have a history of noncompliance will be prioritized for enforcement actions.
• The federal government will lean on state and local authorities to investigate and pursue immigration-related violations. Those that obstruct investigation efforts (which can include simply failing to comply or cooperate) could face criminal charges.
• Prosecution will not be limited to large companies.

Dive deeper: Read our partner law firm Fisher Phillips’ top five takeaways from the DOJ memo.

In December, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index recorded a 3.9% annual gain, up from 3.7% in November. The 10-City Composite saw an annual increase of 5.1% in December, up from 5.0% the previous month, while the 20-City Composite rose 4.5% year-over-year, up from 4.3%. Among the 20 cities, New York again posted the highest annual gain at 7.2%, followed by Chicago at 6.6% and Boston at 6.3%. Tampa again exhibited the lowest annual return, with prices falling 1.1%.

On a month-over-month basis, both the U.S. National Index and 20-City Composite dropped 0.1% before seasonal adjustment, and the 10-City Composite fell 0.04% pre-adjustment. Meanwhile, all three indexes increased 0.5% after adjustment. Since the beginning of the pandemic in 2020, housing prices have risen 8.8% annually, led by markets in Florida, North Carolina, Southern California and Arizona. The National Index continues to trend above inflation but below the home appreciation peak of 18.9% in 2021.

Although the National Index is at a 19th consecutive all-time high, home prices stalled during the second half of 2024. The fastest pricing drop occurred in the West, with San Francisco falling 4.5% and Seattle declining 3.0%. Prices in San Diego and Tampa, previous strongholds, dropped 2.9% and 2.7%, respectively. The Northeast continues to lead with above-trend growth, led by New York for the eighth consecutive month. Meanwhile, Boston reached an all-time high, the only market to do so in December 2024.

Manufacturing activity in the Fifth District improved slightly in February. The Fifth Federal Reserve District consists of Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia. The composite manufacturing index rose from -4 in January to 6 in February. Although activity improved, manufacturers are less optimistic looking ahead, with the outlook for future local business conditions falling from 32 in January to 2 in February.

Among its components, shipments increased from -9 to 12, which led the overall gain in the composite index. New orders rose slightly from -4 to 0. Employment improved from 3 to 9, indicating hiring increased in February. The vendor lead time index dropped from 10 to 2 in February, while the share of firms reporting backlogs remained roughly the same at -6. Companies remained pessimistic about local business conditions, with the index staying the same at -5. The average growth rates of prices paid decreased slightly, while the growth rate of prices received rose in February. Firms still expect both price indexes to increase in the next 12 months.

Expectations for future shipments and new orders both declined but remained in positive territory, suggesting that firms still anticipate improvement in these areas over the next six months but not as much as previously expected. Expectations for backlogs fell, moving from 17 to 3. Meanwhile, firms exhibited a more cautious approach to equipment and software spending, with expectations slipping from 3 to 0. Similarly, expectations for spending on capital expenditures edged down from 3 to 2. In sum, businesses in the Fifth District are growing more hesitant about the prospects for future growth.

In February, Texas factory activity fell amid increased uncertainty, after rising markedly in January. The production index plummeted more than 21 points to -9.1. The new orders index declined more than 11 points to -3.5, after January’s reading was the highest since April 2022. The capacity utilization index dropped nearly 14 points to -8.7, while the shipments index remained positive but slipped from 8.7 to 5.6.

Perceptions of manufacturing business conditions worsened in February, with the general business activity index plunging more than 22 points to -8.3, following a seven-month high in January. The company outlook index fell nearly 24 points to -5.2. Meanwhile, the outlook uncertainty index, which has been volatile in previous months, shot up in February, rising nearly 28 points after a near zero reading in January.

Labor market indicators suggested relatively flat employment and significantly shorter workweeks in February, with the employment index slipping to -0.7 from 2.2, while the hours worked index decreased by more than 16 points to -14.2, the lowest reading since mid-2020. Nearly 12% of firms reported net hiring, while roughly the same percentage (12.4%) noted net layoffs. Upward pressure on prices intensified in February, while wages fell slightly. The prices paid for raw materials index soared from 17.5 to 35.0, while the prices paid for finished goods index increased marginally, from 6.2 to 7.8. Meanwhile, the wages and benefits index edged down from 20.9 to 16.7.

The outlook for future manufacturing activity is still positive, but less optimistic than January’s reading. The future production index decreased from 44.8 to 28.3, with nearly 42% of firms expecting increases in output in the next six months. Similarly, the future general business activity index fell nearly 28 points to 7.7.

Manufacturing activity contracted modestly in the Tenth District in February, with the month-over-month composite index remaining unchanged at -5. Meanwhile, expectations for future activity remained positive. The Tenth Federal Reserve District encompasses the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming; and the northern half of New Mexico. The month-over-month decrease in activity was due primarily to declines in nondurable manufacturing, specifically food, chemicals and paper. Most month-over-month indexes were negative, apart from prices, inventories and supplier delivery times.

Production fell four points to -13, while new orders slipped from -6 to -7. Employment declined in February, falling from 1 to -14, as did the average employee workweek, turning negative from 1 to -9. The backlog of orders remained negative but improved slightly from -19 to -12. The year-over-year composite index for factory activity dipped from -9 to -18. Prices received and prices for raw materials increased both month-over-month and year-over-year in February.

In February, survey respondents were asked about their firms’ anticipated reactions to trade policy and their ability to pass along costs to consumers. Firms are split on how trade policy changes will impact their business, with 43% saying there will be no change to demand or revenues, while roughly one-quarter predict demand will be lower (26%) or higher (23%). Meanwhile, just 7% of firms believe demand will be lowered significantly, compared with 1% who think it will be improved substantially. Nearly 40% of firms expect to pass along 0–20% of costs to their customers, while 23% forecast to pass along 80–100% of costs.

Consumer confidence declined seven points in February to 98.3. The Consumer Confidence Index, which fell for the third consecutive month, exhibited the largest monthly decrease since August 2021. The index is now at the bottom of the range that has prevailed since 2022.

The Present Situation Index, reflecting current business and labor market conditions, fell 3.4 points to 136.5. Meanwhile, the Expectations Index, which reflects consumers’ short-term outlook for income, business and labor market conditions, dropped 9.3 points to 72.9 and fell below the recession signal threshold of 80 for the first time since June 2024.

Of all components, only consumers’ assessments of current business conditions improved, and only slightly, with 19.6% of consumers saying business conditions were “good,” up from 18.5% in January. On the other hand, consumers’ outlook for future business conditions turned negative. Views of the current labor market situation softened, with 33.4% of consumers saying jobs were “plentiful,” while 16.3% said jobs were “hard to get.” Consumers’ pessimism about future labor market conditions worsened to a 10-month high, with a higher percentage anticipating fewer rather than more jobs to be available in the next six months. February’s drop in confidence was strongest for consumers between the ages of 35 and 55.

As inflation pressures have heated up in recent months, inflation expectations likewise ticked up from 5.2% to 6.0% in February. Meanwhile, expectations for higher interest rates rose, with more than half of consumers (51.7%) expecting higher rates in the next 12 months. Consumers’ views of their current financial situation softened from January, following a series high, while expectations for a recession in the next 12 months increased to a nine-month high. Nevertheless, buying plans for homes improved, perhaps linked to a decrease in mortgage rates, but plans to buy new cars and other big-ticket items declined. Mentions of trade and tariffs in written responses sharply increased to levels not seen since 2019, likely influencing inflation expectations.

Bertha Ostiguin thought for years about going back to school. She had left the workforce to be a stay-at-home mom, and when she started working in production at H-E-B, she was still raising two boys at home. The idea of working part time while also studying and raising her kids felt daunting. But about six years into her manufacturing career at H-E-B, she joined the Advanced Manufacturing Technician program through TX FAME – Alamo in Alamo, Texas—more than 25 years after she was last in school.

“Honestly, I was scared that I wasn’t going to be able to make it,” said Ostiguin. “But it has been one of the best choices I’ve made. … I love it, I love what it does, and I cannot talk enough about it.”

The program: Founded in 2010 by Toyota and operated today by the Manufacturing Institute—the workforce development and education affiliate of the NAM—FAME aims to help students become highly skilled, sought-after workers capable of meeting the needs and challenges of the modern manufacturing sector.

• It provides current and aspiring workers with on-the-job training and classroom education, leading to an associate’s degree and the FAME certificate.

The opportunity: While Ostiguin was already several years into a manufacturing career, her experience at FAME has helped to expand her skillset, allowing her to advance her career at H-E-B and set herself up for greater success throughout her working life.

The benefits: In addition to teaching specific qualifications and in-demand technical skills, FAME helps to provide participants with the soft skills and professional behaviors they’ll need to succeed in today’s workforce, like communication. According to Ostiguin, it made her a better mentor to other people at work.

• “As I’m learning these things, I’m also teaching the young guys,” said Ostiguin. “And I would tell them, from my experience, why all this makes a difference.”

A model for others: In an industry that often has more men than women, Ostiguin saw early on that she was setting an example for others. She promised herself that she was going to finish the program—not just for herself and her sons, but for other women in manufacturing who might follow her lead. Ultimately, Ostiguin became the first woman from H-E-B to complete the FAME program, at the top of her class.

• “I started seeing the impact it was having for females, and how it wasn’t just about me anymore—it was about the bigger picture,” said Ostiguin.

A word of advice: Ostiguin is proud of what she has accomplished and encourages others to take advantage of opportunities to increase their knowledge and improve their skills.

• “Absorb as much as you can, and ask the questions that you have to ask,” said Ostiguin. “That’s the only way we’re all going to learn.”

From the MI: “FAME isn’t just transforming careers—it’s strengthening companies,” said MI President and Executive Director Carolyn Lee. “Bertha’s journey shows how investing in workforce development creates highly skilled employees who bring immediate value to their employers and themselves, creating a winning combination for long-term success.”

Biopharmaceutical company Lilly will build four new manufacturing sites across the U.S., it announced Wednesday at a Washington, D.C., press conference. The event was attended by NAM President and CEO Jay Timmons, Commerce Secretary Howard Lutnick, National Economic Council Director Kevin Hassett, Indiana Sen. Todd Young and Lilly Executive Vice President and President of Manufacturing Operations (and NAM board member) Edgardo Hernandez, among others.

What’s going on: Three of the planned manufacturing campuses will focus on producing active pharmaceutical ingredients, reshoring “critical capabilities of small molecule synthesis and further strengthening Lilly’s supply chain,” the company said in a press release. The fourth site will “extend [Lilly’s] global parenteral manufacturing network for future injectable therapies.”

• The investment in the four sites will bring Lilly’s total U.S. capital expansion commitment to more than $50 billion since 2020.
• Lilly—which in recent years has made $23 billion worth of investments in new research and manufacturing sites in the American South and Midwest—is in talks with several states about building the facilities there, but it is accepting additional expressions of interest from states until March 12.

The anticipated benefit: The four sites are expected to create more than 3,000 permanent skilled jobs and more than 10,000 construction jobs during building, according to the company.
 
The tax reform factor: Lilly’s planned expansion reflects “decades of research and dedication,” Timmons said at the event announcing the investment. It “is the culmination of sustained planning made possible by the certainty created through smart public policy—particularly the 2017 tax reforms that President Trump … championed back at a meeting of the NAM Board of Directors in September 2017.”

• Many of those manufacturing-critical reforms have been allowed to expire, however, and others will expire at the end of the year—unless Congress acts, and soon, Lilly Chair and CEO David Ricks said.
• “The Tax Cuts and Jobs Act legislation passed in 2017 during President Trump’s first term in office has been foundational to Lilly’s domestic manufacturing investments, and it is essential that these policies are extended this year.”

Keep the momentum going: Lilly’s announcement shows other manufacturers “exactly why [they] have reason for optimism and confidence,” Timmons went on. “But to keep this momentum going—to encourage more groundbreaking investments, more job creation and more life-changing innovation—a comprehensive manufacturing strategy must become the reality … because when manufacturing wins, America wins.”

The House late Tuesday approved a Republican budget blueprint for President Trump’s tax-cut and border-security agenda (Reuters, subscription).

• NAM President and CEO Jay Timmons called the move “a historic, pivotal step to[ward] advanc[ing] a comprehensive reconciliation package that will preserve” critical pro-manufacturing tax reforms and unleash “American energy dominance.”

What’s going on: “The measure is a preliminary step to extending Trump’s 2017 tax cuts later this year,” Reuters reports. “Tuesday’s vote sent the budget resolution to the Senate, where Republicans are expected to take it up.”

• The plan—which calls for $4 trillion to $4.5 trillion in tax cuts and $1.5 trillion to $2 trillion in spending reduction over 10 years—also includes measures to increase domestic energy development and production.

Why it’s so important: Congress must capitalize on the momentum of the budget resolution’s passage by preserving the crucial tax reform measures from President Trump’s 2017 Tax Cuts and Jobs Act, Timmons continued—because “[e]very day we wait means jobs and opportunity lost.”

• “As part of the comprehensive, commonsense manufacturing strategy that America needs, protecting tax reform will strengthen our industry and our communities. It’s time to continue this momentum and act now to Make America Great for Manufacturing Again. When manufacturing wins, America wins.”

What’s next: House Speaker Mike Johnson (R-LA) has said he anticipates passing the tax, energy, border-security and defense items via reconciliation by the first week of April.