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In July, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index recorded a 1.7% annual gain, one of the weakest annual price increases in the past decade. The 10-City Composite saw an annual increase of 2.3% in July, down from 2.7% the previous month, while the 20-City Composite rose 1.8% year-over-year, down from 2.2%. Among the 20 cities, New York again posted the highest annual gain at 6.4%, followed by Chicago at 6.2% and Cleveland at 4.5%. Tampa again recorded the lowest annual return, with prices falling 2.8%.

On a month-over-month basis, the U.S. National Index ticked down 0.2% before seasonal adjustment. At the same time, the 10-City and 20-City Composites both decreased 0.3%. After seasonal adjustment, the National Index and the 10-City and 20-City Composites all fell 0.1%.

Short-term price movements in July underscore the housing market’s fragility. Geographic divergence continues to characterize changes as Northeastern and Midwestern markets, after seeing modest price growth, are now top performers. Sun Belt and Western markets are now faring worse, including Tampa (down 2.8%), Phoenix (down 0.9%), Miami (down 1.3%), San Diego (down 0.7%) and San Francisco (down 1.9%).

This housing cycle is showing signs of normalization with the ongoing rotation in regional performance. Stability is emerging as markets with strong local economies are thriving in a market more aligned with overall inflation. Furthermore, this new equilibrium points to a healthier trajectory for housing in the long run.

Consumer confidence decreased 3.6 points in September to 94.2, the lowest level since April. Among its components, the Present Situation Index and Expectations Index both declined, with consumers’ pessimism about future job availability and future business conditions being partially mitigated by stronger expectations about future income.

The Present Situation Index, reflecting current business and labor market conditions, fell 7 points to 125.4. Meanwhile, the Expectations Index, which reflects consumers’ short-term outlook for income, business and labor market conditions, declined 1.3 points to 73.4, remaining below the recession signal threshold of 80 since February 2025.

Views of the current labor market situation are still poor, with 26.9% of consumers saying jobs were “plentiful,” down slightly from August (30.2%), while 19.1% said jobs were “hard to get,” unchanged from August and up from 14.5% in January. Looking to the future, 25.6% anticipate fewer available jobs in the next six months, down slightly from 25.9% the prior month.

Mentions of high prices and inflation rose in September, regaining the top position influencing consumers’ views of the economy. Meanwhile, mentions of tariffs declined in September but continued to be associated with concerns about higher prices. Consumers’ 12-month inflation expectations stepped down from 6.1% to 5.8% in September. Meanwhile, 51.9% of consumers, compared to 52.1% in August, expect interest rates to rise, and a larger share of consumers (25.6% vs. 23.6% in August) expect rates to fall.

Buying plans for cars decreased in September, while buying plans for homes increased to a four-month high. Consumers’ plans for buying big-ticket items changed little overall in September but exhibited variation across items. For example, intentions to purchase TVs and dryers rose the most, while refrigerators saw the largest declines. Vacation intentions fell again to the lowest level since April, with lower intentions to travel abroad driving the decline. Overall, consumers’ views of their current and future financial situation declined slightly from August.

In September, Texas factory activity continued to expand but at a slower pace than the prior month. The production index declined from 15.3 to 5.2, falling below the average of 9.6. Other measures also moved down in September, pointing to slower growth. The new orders index fell 8.4 points into negative territory in September, decreasing to -2.6. Capacity utilization slipped 9.8 points to 3.9, while shipments dropped 7.5 points to 6.7.

Perceptions of manufacturing business conditions worsened in September, with the general business conditions index falling 6.9 points to -8.7, while the outlook also declined, with the company outlook index decreasing 4.3 points to -1. Meanwhile the uncertainty index dropped 4.4 points to 13.9, below the series average of 17.2.

Labor market indicators suggest a decline in headcounts and a slightly longer workweek in September, with the employment index dropping 12.2 points to -3.4, while the hours worked index fell 11.6 points but remained positive at 3.4. Nearly 13% of firms reported net hiring while a larger percentage (16.1%) noted net layoffs.

Price and wage pressures were largely unchanged in September. The prices paid for raw materials index edged down 0.3 points to 43.4. Meanwhile, the prices received for finished goods index declined 3.4 points to 11.7. The wages and benefits index inched up 0.5 points to 15.9 but stayed below the series average of 21.

The outlook for future manufacturing activity weakened from August, with the future production index falling 8.8 points to 31.6. Meanwhile, the future general business activity index and future company outlook index both declined, dropping to 8.4 and 11.7, respectively.

The S&P Global Manufacturing PMI was 52.0 in September, down slightly from the August reading of 53.0. New orders increased for the ninth consecutive month, although at a slower rate and below the survey average. Tariffs continued to hit exports, particularly to Canada and Mexico, and lead to increased input and output costs in September. Nonetheless, output price inflation slowed to its weakest pace since January.

Despite a slowdown in demand growth leading to weaker output gains, production rose sufficiently to allow stocks of finished goods to rise for the second consecutive month amid worries over tariffs and supply-side uncertainty. Meanwhile, delivery times lengthened in September due to difficulties importing goods and stock shortages.

Although tariffs continued to weigh on business confidence, overall business expectations improved slightly compared to August. Many manufacturers anticipate an increase in sales over the next year, and some see tariffs as driving expansions in domestic production. Furthermore, despite ongoing uncertainty related to trade and government policies, many manufacturers increased employment levels in September.

In September, the U.S. manufacturing sector contracted for the seventh consecutive month but at a slower pace than the prior month, with the ISM Manufacturing^® PMI increasing to 49.1% from 48.7% in August. One of the four demand indicators improved in September, with the Backlog of Orders Index rising 1.5 percentage points to 46.2%. Meanwhile, the New Orders, New Export Orders and Customers’ Inventories Indexes contracted at faster rates. On the other hand, the Employment Index (45.3%) declined at a slower pace, while the Production Index returned to growth after contracting in August, increasing from 47.8% to 51%.

The New Orders Index contracted after one month of expansion, falling 2.5 percentage points from August. The index hasn’t shown consistent growth since a 24-month streak of expansion ended in May 2022. Of the six-largest manufacturing sectors, none 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 seventh consecutive month at a faster pace, 4.6 percentage points lower than August. The continued contraction is likely indicative of dampened demand amid ongoing trade tensions and policy uncertainty. Meanwhile, the Imports Index contracted for the sixth consecutive month and at a faster rate, down 1.3 percentage points to 44.7% in September. Imports continued to contract as tariff pricing results in lower demand compared to prior months.

The Employment Index contracted for the eighth consecutive month but at a slower pace than the prior month, up 1.5 percentage points from August to 45.3%. Of the six-largest manufacturing sectors, none 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, three respondents noted reduced headcounts.

The Prices Index decreased 1.8 percentage points to 61.9%, indicating raw materials prices grew for the 12th straight month in September, but at a slower pace. Of the six-largest manufacturing sectors, all reported increased prices, led by machinery. The increase continues to be driven by steel and aluminum price increases impacting the entire supply chain, as well as the tariffs applied to most imported goods. Roughly 32.5% of companies reported paying higher prices, slightly down from 33.5% in August but still up dramatically from 21% in January.

Job openings for manufacturing decreased by 29,000 to 409,000 in Nondurable goods job openings in August declined by 26,000 to 150,000, while durable goods job openings edged down by 3,000 to 259,000. The manufacturing job openings rate fell to 3.1% from 3.3% in July and from 3.5% the previous year. The rate for nondurable goods manufacturing dropped from 3.5% to 3.0%, while it stayed the same at 3.2% for durable goods.

In the larger economy, the number of job openings ticked up to 7.2 million, an increase of 19,000 from July but a decrease of 422,000 from the previous year. The job openings rate stayed the same at 4.3%, down from 4.6% 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 decreased 114,000 to 5.1 million in August and 104,000 from the previous year. The hires rate for the overall economy edged down 0.1% in August to 3.2%. Meanwhile, the hires rate for manufacturing stayed the same at 2.4%. The hires rate for durable goods similarly stayed the same at 2.2%, while the hires rate for nondurable goods inched up 0.1% to 2.8%.

In the larger economy, total separations, which include quits, layoffs, discharges and other separations, declined 110,000 from July to 5.1 million and 59,000 from the previous year. The total separations rate edged down 0.1% to 3.2% for the overall economy but inched up 0.1% to 2.5% for manufacturing. Within that rate, layoffs and discharges increased by 5,000 in August for manufacturing, while quits fell by 3,000. The quit and layoff rates continue to remain lower for manufacturing than the total nonfarm sector.

Existing home sales edged down 0.2% in August but increased 1.8% over the year. Housing inventory stepped down to 1.53 million units, reflecting a 1.3% decline from July but an 11.7% jump from last year. The median existing home price was $422,600, up 2.0% from last year. The Midwest and West posted monthly increases in existing home sales, while the Northeast and South registered declines in August.

Single-family home sales inched down 0.3% in August, but rose 2.5% over the year, with the median price increasing 1.9% from August 2024 to $427,800. Condo and co-op sales stayed the same over the month at 370,000 units in August but declined 5.1% from last year. Meanwhile, the median price for condos and co-ops stepped up 0.6% from the prior year to $366,800.

Homes were typically on the market for 31 days in August, up from 28 days in July and 26 days in August 2024. First-time buyers made up 28% of sales in August, the same as July but up from 26% in August 2024.

The S&P Global Flash U.S. Manufacturing PMI slipped from 53 to 52 in September, a two-month low. However, it remained above the 50-point marker that signals growth in business conditions. Factory production rose as new orders increased for a ninth straight month. On the other hand, weak sales growth led inventories to rise at an unprecedented rate to the largest buildup of finished goods inventories in the 18 years of the survey. Meanwhile, supplier delivery times in September lengthened to the greatest degree in four months. Manufacturers’ input cost inflation remained elevated at one of the fastest paces since the pandemic. Meanwhile, selling prices for goods cooled to the slowest rate since January as manufacturing firms reported difficulties passing higher costs on to customers due to weak demand and growing competition. Tariffs were again overwhelmingly cited as the principal cause of further cost increases in September.

Overall business activity slowed to a three-month low, falling from 54.6 in August to 53.6 in September. Despite the weaker pace of growth, the third quarter as a whole has seen the strongest average monthly expansion since the fourth quarter of 2024, with output growing for 32 consecutive months. The services sector drove the increase in business activity in September, while the manufacturing sector grew at a weaker rate than in August. Overall, new order growth slowed despite exports rising for the first time since March. As with manufacturing, prices increased but at the slowest pace since April.

Meanwhile, optimism about future business conditions improved in September, partly reflecting the anticipated beneficial impact of lower interest rates and despite continued fears regarding tariff policies and broader political uncertainty. Furthermore, respondents remain hopeful that tariffs could stimulate domestic production in the coming year.

Manufacturing activity in the Fifth District deteriorated in September, and at a faster pace than the previous month, with the composite manufacturing index dropping from -7 to -17. Meanwhile, the local business conditions index fell from 0 in August to -12 in September. Despite worsening conditions, manufacturers are less pessimistic about the future, with the outlook for future local business conditions rising from -10 in August to -1 in September. The Fifth Federal Reserve District consists of Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia.

Among its components, shipments, new orders and employment all remained negative and contracted at a faster pace in September, dropping to -20, -15 and -15, respectively. The vendor lead time index stepped down from 11 in August to 10 in September. Meanwhile, the share of firms reporting backlogs worsened, falling from -12 to -21. The average growth rate of prices paid declined slightly, while growth in prices received increased in September.

Looking ahead, firms still expect both price indexes to rise in the next 12 months, with prices paid rising at a slower rate and prices received at a faster rate than forecasted in August. Expectations for future shipments decreased from 13 to 0, while new orders inched down from 9 to 8. Expectations for backlogs improved slightly, moving from -10 to -8. Meanwhile, firms’ expectations about equipment and software spending remained negative but improved to -9 from -18. Expectations for capital expenditures also stayed negative but stepped up to -11 from -15 in August. In sum, businesses in the Fifth District are slightly more optimistic about prospects for future growth, but they are still avoiding making new investment plans.

Manufacturing activity stepped up in the Tenth District in September, with the month-over-month composite index at 4, up 3 points from August. Meanwhile, expectations for future activity remained expansionary but softened, declining 4 points to 7. 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 rise in activity was due to increases in durable manufacturing, while nondurable manufacturing activity slowed. New orders slowed while production increased. Shipments ticked up, while new orders for exports decreased, but at a slower pace than the prior month.

Production increased from 0 to 4, while new orders decreased from 5 to 2. New export orders remained negative but rose from -15 to -9 over the month. Employment jumped in September, advancing from 0 to 7, and the average employee workweek remained unchanged at 3. The backlog of orders ticked up from -15 to -13. Both the pace of growth for prices received and paid eased month-over-month, with raw material prices falling from 43 to 40 and prices received decreasing 8 points to 13. Over the year, prices received rose at a slower pace, slipping 6 points to 55, while prices for raw materials stepped up from 69 to 74.

In September, survey respondents were asked about expectations for employment and product demand for 2026. The responses were mixed but mostly positive. Approximately 46% of firms expect their employment levels to be slightly higher by the end of 2026, while 2% of firms expect them to be significantly higher, and 35% expect no change. Meanwhile, 15% of firms expect employment levels will be slightly lower, while 2% expect they will be significantly lower. When firms were asked about demand for their products in 2026, half of the firms expect demand to be slightly higher in 2026, while 7% expect demand to be significantly higher. On the other hand, 20% of firms expect no change, 20% expect demand to be slightly lower and 3% expect it to be significantly lower.