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The Manufacturing Institute’s recent Heroes MAKE America ‘Military to Manufacturing’ Career Fair at Fort Bragg in North Carolina highlighted Johnson & Johnson’s commitment to helping our nation’s heroes.

What’s going on: The day’s event, which also comprised an employer spotlight and was held last Thursday on the 107-year-old military base, delivered on HMA’s mission: connecting military members seeking jobs with national and regional manufacturers looking for talent. More than 20 employers attended, hoping to recruit top talent.

• Since launching in 2018, Heroes MAKE America—an initiative of the NAM’s 501(c)3 workforce development and education affiliate, the Manufacturing Institute—has exposed nearly 50,000 participants searching for their next manufacturing careers through training and events.
• Johnson & Johnson Chief Technical Operations and Risk Officer and NAM Board chair and MI board member Kathy Wengel was on hand to give remarks to the audience, which consisted of HMA alumni, future class participants, active duty and transitioning military members, veterans, military spouses and state and military leadership.
• Wengel was joined by MI President and Executive Director Carolyn Lee, NAM President and CEO Jay Timmons, who serves as Chair of the MI’s Board, Johnson & Johnson Wilson plant manager and U.S. Army veteran Pete Goodridge, and North Carolina Department of Military and Veterans Affairs General Counsel Jimmie Bellamy.

Manufacturing needs you: A common theme among the manufacturing leaders’ remarks was the still-high number of open (and rewarding) jobs in the industry—currently at about 400,000.

• “We want even more people from across the nation to join this industry,” Lee told the crowd. “The skills you bring as transitioning service members—leadership, discipline, problem-solving, teamwork, technical expertise and more—are exactly what manufacturers are looking for. That’s what today is all about: connecting you with companies eager to meet you and that value your experience.”

Investing in the state—and the military: Timmons talked about the groundbreaking earlier this year of J&J’s new biologics facility in Wilson, North Carolina, as well as the health company’s announcement of its intention to invest $55 billion in U.S. manufacturing over the next four years.

• “That investment sends a powerful signal about the opportunities in store for those considering this career path,” Timmons added.
• Added Wengel, “In addition to our partnership with Heroes MAKE America, we have several initiatives at J&J to support military hires and the military community as a whole.”
• Through the Veteran’s Leadership Council, the group gives its workforce access to mentors and volunteers, leadership and development opportunities. It also has a strong military leave policy, which provides full pay and benefits to activated employees for up to three years. J&J partners with leading veterans service organizations to offer a wide range of services to veterans and their families.

Why Heroes? Heroes MAKE America—which has a Skillbridge Certified Logistics Technician course in partnership with Fayetteville Technical Community College, near Fort Bragg  also offers in-person and virtual training programs nationwide to assist veterans and transitioning military members in earning industry recognized certifications and skills needed in modern manufacturing.

• These include courses in manufacturing operations, industrial system maintenance, automation and robotics, and aviation maintenance.
• “These programs don’t just train you,” Lee told the audience. “They open doors.”
• More than 500 companies in 49 states have hired HMA graduates at salaries exceeding $72,000. The program has a 96% graduation rate and a 92% placement rate.

Dive deeper: Learn more about how your company can get involved with Heroes MAKE America here.

The NAM urged the Supreme Court to allow a lawsuit against energy manufacturers to proceed in federal court instead of state court, arguing that they were operating as federal contractors at the time of the actions at issue.

Why it matters: Preserving federal officer removal jurisdiction—i.e., the requirement that suits against contractors operating on the government’s behalf take place in federal court—is a crucial protection for businesses that work with the government, the NAM argued in its amicus brief in Chevron U.S.A., Inc. et al. v. Plaquemines Parish, et al.

• Without the guarantee of federal court jurisdiction, federal contractors may be hesitant to take on work that is nationally important but unpopular in certain states.

The background: During World War II, several oil companies obtained federal contracts to refine oil along the Louisiana coast.

• Decades later, these companies were sued in state court by several Louisiana municipalities that sought damages for the drilling’s impact on the coastal environment.

Whose turf? The case was removed to a federal court, as the companies were acting as government contractors when they undertook the drilling.

• The municipalities appealed the change of venue, however, and the Fifth Circuit upheld their appeal—wrongly, as the NAM has charged in a series of amicus briefs.

Bad reasoning: The Fifth Circuit held that for the federal officer removal statute to apply, federal contracts must contain an explicit “directive” from a federal officer, such that parties to the contract are “acting under” the officer.

SCOTUS involved: The case has been on a merry-go-round of appeals and remands, finally resulting in the defendant oil companies seeking U.S. Supreme Court review.

• The Supreme Court granted certiorari in June—giving the NAM the opportunity to file its sixth brief in defense of manufacturers performing work on the government’s behalf.

The NAM’s argument: In its latest brief, the NAM argued that federal contractors have long relied on the protection of the federal officer removal statute when contracting with the government.

• The Fifth Circuit’s “contractual directive” reasoning takes an unjustifiably narrow view of the statute, which is intended to apply to all work “related to” a federal contract, the NAM charged.

Administration agrees: The Department of Justice also filed an amicus brief in the case, supporting the NAM’s position and asserting that the oil production at issue was connected closely to aviation fuel refining efforts for the U.S. military.

Continued advocacy: Through the Manufacturers’ Accountability Project, the NAM is making sure courts uphold long-standing legal protections that enable manufacturers to serve the national interest without fear of politically motivated lawsuits.

Building permits declined 3.7% in August and 11.1% over the year. Permits for single-family homes in August decreased 2.2% from July and 11.5% over the year. Meanwhile, permits for buildings with five or more units dropped 6.7% from July and 10.8% over the year.

In August, housing starts declined 8.5% from July and 6% from August 2024. Starts for single-family homes fell 7% from July and 11.7% over the year. Meanwhile, buildings with five or more units dropped 11% over the month but jumped 15.8% over the year.

Meanwhile, housing completions increased 8.4% over the month but decreased by the same percentage over the year. Single-family home completions gained 6.7% from July and 5.6% from August 2024. Completions for buildings with five or more units grew 10.8% over the month but plunged 28.7% from one year ago.

The Federal Open Market Committee lowered its interest rate target range by 25 basis points to 4.00%–4.25% at its September meeting. In a change to its previous statement, the FOMC noted that job gains have slowed, and the unemployment rate has edged up. At the same time, inflation has moved up. Nonetheless, the committee judged that downside risks to employment have risen, which has shifted the balance of risks and provided support for the decision to lower its interest rate target. One FOMC member, Stephen Miran, dissented, desiring to lower the target range by 50 basis points.

In the press conference following the meeting, Federal Reserve Chairman Jerome Powell noted that job gains have slowed significantly, likely due to both lower immigration and lower labor force participation. Chairman Powell also noted that in recent months, goods inflation has picked up due to tariffs, while it has moved down for services.

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, signaled a more dovish stance than the June summary. Six Federal Reserve officials project there will be no additional rate cuts in 2025, while nine anticipate an additional 50 basis points worth of cuts in 2025. Furthermore, the projections show that officials expect inflation to remain elevated for longer than they expected in June. On the other hand, the projections show officials expect real GDP to rise more in 2025 than previously anticipated.

U.S. import prices rose 0.3% in August, after advancing 0.2% in July, with higher nonfuel import prices driving the increase. Over the past year, import prices stayed the same. Meanwhile, U.S. export prices stepped up 0.3% in August, with nonagricultural export prices driving the increase. Over the past year, export prices climbed 3.4%, the largest over-the-year rise since December 2022.

In August, U.S. import prices for manufacturing rose 0.2% over the year, but with significant divergences in prices across the industry. Petroleum and coal products manufacturing experienced the most significant over-the-year U.S. import price declines in August, falling 14.6%. On the other hand, the greatest yearly increase in U.S. import prices occurred in primary metal manufacturing, which advanced 11.3% from August 2024. Meanwhile, U.S. export prices for manufacturing in August grew 3.3% over the year, with primary metal manufacturing export prices exhibiting the largest rise (27%).

Fuel import prices decreased 0.8% over the month in August, following a 2.5% increase in July. Lower prices for petroleum and natural gas drove the decline, falling 0.2% and 13.2%, respectively. Over the past year, fuel import prices have fallen 10.1%. Import petroleum prices dropped 10.7% over the year in August, while natural gas prices surged 43.5% over that period. Nonfuel import prices rose 0.4% in August, the largest increase since April 2024. Higher prices for consumer goods, nonfuel industrial supplies, capital goods and automotives more than offset lower prices for foods, feeds and beverages. Nonfuel import prices increased 0.9% on an over-the-year basis.

After declining 0.2% in July, agriculture export prices stayed the same in August. Over the past 12 months, agriculture export prices advanced 5.1%. Meanwhile, nonagricultural export prices rose 0.3% in August. Higher prices for consumer goods, nonagricultural industrial supplies and materials, capital goods and automotives drove the increase. Over the past year, nonagricultural export prices jumped 3.2%, the largest over-the-year increase since December 2022.

Manufacturing activity in New York state declined in September for the first time since June, with the headline general business conditions index falling nearly 21 points to -8.7. The new orders index plummeted 35 points to -19.6, while the shipments index dropped nearly 30 points to -17.3, the lowest levels for both indexes since April 2024, indicating significant reductions in orders and shipments. Unfilled orders decreased further, from -5.5 to -6.9, while inventories increased 1.5 points to -4.9 in September, indicating that business inventories continue to shrink but at a slightly slower pace. Delivery times stayed the same, but supply availability slipped 3.3 points to -8.8.

Employment declined slightly in September, with the index for the number of employees coming in at -1.2. Meanwhile, the average employee workweek dipped to -5.1 from 0.2 in August, signaling a modest drop in hours worked. The prices paid index fell 8 points to 46.1 while the prices received index also moderated slightly, declining 1.3 points to 21.6, a reflection of a slower pace of increase for prices received and prices paid.

Firms’ optimism regarding the future remained positive but subdued in September. The future business activity index stepped down 1.2 points to 14.8. In the next six months, new orders are still expected to increase, and at roughly the same pace anticipated last month, clocking in at 16.6. The future employment index fell to 1.2, suggesting that employment levels are not expected to grow meaningfully over the next six months. Input prices are expected to still climb but at a slower pace, falling from 64.2 to 57.8. On the other hand, selling price expectations ticked up 1.8 points to 43.1. Capital spending plans remained soft, falling 3 points to -3.9.

In September, Philadelphia’s regional manufacturing activity expanded notably following weakness in August. Rising from -0.3 to 23.2, the index for current general business activity recorded its highest reading since January. Just 16.7% of firms reported decreases in activity this month, while 39.9% noted increases. The indexes for new orders and shipments both improved, rising from -1.9 to 12.4 and from 4.5 to 26.1, respectively. Meanwhile, the employment index was little changed at 5.6, but the average employee workweek index rose 10.2 points to 14.9.

The prices paid index fell from 66.8 to 46.8, while the prices received index also declined, moving to 18.8 from 36.1. As has been the case for many months, the prices received index remained lower than the prices paid index, indicating that manufacturers have been absorbing a portion of higher costs paid.

Looking ahead, indicators showed expectations for future growth have continued to improve from previous months. After stepping up 3.5 points in August, expectations for future general business activity rose 6.5 points to 31.5 in September. A higher proportion of firms (52.2%) expect increases in activity compared to last month’s reading of 40.5%, though a higher proportion (20.8%) also anticipate activity will decline, compared to last month’s reading of 15.5%. Meanwhile, the future new orders index edged up from 39.2 to 42.4, but the future shipments index weakened from 40.3 to 31.0. The capital expenditures index fell from 38.4 to 12.5. The future prices paid index ticked up from 68.4 to 69.8, and the future prices received index jumped in September from 48.5 to 64.8. Additionally, the index for future employment increased from 12.7 to 23.7.

Industrial production ticked up 0.1% in August, while manufacturing output increased 0.2% after edging down 0.1% in July. At 100.3% of its 2017 average, manufacturing production in August rose just 0.9% from the same month last year. Capacity utilization for manufacturing inched up to 76.8%, up 0.1 percentage point from July and advanced 1.2% over the past year. Capacity utilization remains 1.4 percentage points below its long-term average from 1972 to 2024.

In August, major market groups posted mixed results. Consumer goods production rose 0.4%, while business equipment output dipped 0.1%. The rise in production of consumer durables (up 0.6%) was primarily driven by automotive products’ output growth, advancing 1.3%, while the index for consumer nondurables increased 0.3%, experiencing gains in nearly every category. Among business equipment, the 1.2% drop in the index for industrial and other equipment more than offset the 2.1% and 0.7% rise in the indexes for transit equipment and information processing equipment, respectively. On the other hand, the indexes for construction supplies and materials rose 0.6% and 0.1%, respectively, while the index for business supplies fell 0.4% in August.

Durable goods manufacturing rose 0.2% in August and 1.5% from the year prior. Monthly growth was greatest for motor vehicles and parts (up 2.6%), while furniture and related products and miscellaneous manufacturing posted the largest declines at 1.7% each. Meanwhile, led by a 2.5% boost in textile and product mills output, nondurable goods manufacturing increased 0.3% in August and 0.7% from August 2024.

The Office of the U.S. Trade Representative published an official request for public comment yesterday on the U.S.–Mexico–Canda Agreement. The notice is part of the process for the schedule six-year review of the landmark agreement, which the NAM helped to shape and secure back in 2019.

The timeline: The deadline for comments is Nov. 3, ahead of a USTR hearing on Nov. 17.

The topics: The notice includes specific topics that the USTR would like respondents to address, including:

• “Any aspect of the operation or implementation of the USMCA”;
• “Any issues of compliance with the Agreement”;
• “Recommendations for specific actions that USTR should propose ahead of the Joint Review to promote balanced trade, new market access and alignment on economic security with Mexico and Canada”;
• “Factors affecting the investment climate in North America and in the territories of each Party, as well as the effectiveness of the USMCA in promoting investment that strengthens U.S. competitiveness, productivity and technological leadership”; and
• “Strategies for strengthening North American economic security and competitiveness, including collaborative work under the Competitiveness Committee, and cooperation on issues related to nonmarket policies and practices of other countries.”

Mexico’s notice: The government of Mexico also opened a 60-day window for public comment.

• For NAM members seeking to comment through their affiliates, the notice can be accessed here.

What NAM members should do: The NAM is issuing an urgent call for member feedback on specific nontariff barriers.

• This feedback might be part of bilateral talks with Canada and Mexico, and so should be sent to the NAM as soon as possible, the NAM’s trade experts stressed. The NAM will be submitting a draft letter to the USTR summarizing manufacturers’ priorities for policymakers.

The NAM’s focus: The NAM asks that members focus on four broad topics:

• Technical fixes to make the USMCA function better
• Bilateral issues in Mexico or Canada that the review could help address
• New mechanisms or tools that could be built to counter shared challenges in third markets, particularly nonmarket economies
• Sector-specific agreements or commitments that could be pursued to strengthen North American manufacturing

Get in touch: If you are interested in contributing to this important message about an essential pillar of U.S. trade policy, please contact NAM Director of International Policy Kevin Doyle.

Abuse of the 340B program has caused manufacturers’ health care costs to rise, as they miss out on negotiated drug manufacturer rebates. Reforms are necessary, the NAM told Congress this week.

What’s going on: “The 340B program, intended to provide lower cost medicines and expand care for low-income and underserved patients, has rapidly and massively expanded beyond its intent,” NAM Vice President of Domestic Policy Jake Kuhns told House Subcommittee on Oversight Chair David Schweikert (R-AZ) and Ranking Member Terri Sewell (D-AL) on Tuesday ahead of a hearing on tax-exempt hospital spending.

• “Many covered entities, which include tax-exempt hospitals, have taken advantage of the program to increase their profits. This has added to health care costs for manufacturers.”
• The 340B program allows participating hospitals and clinics to charge patients’ insurance the full list price for pharmaceuticals that were purchased at a discount. Patients then become ineligible to receive negotiated drug rebates, as duplicate discounts are prohibited by law.
• Hospitals keep the spread, boosting their profits, as manufacturers and manufacturing workers pay more for health care.
• Dr. Ge Bai, professor of health, policy, and management at
  Johns Hopkins Bloomberg School of Public Health, noted the substantial profits for hospitals and lack of transparency in the 340B program in her opening statement at the hearing.

The costs: “The expansion of [the 340B] program was associated with approximately $23 billion in additional employer-based health care expenses in 2023, of which employees paid about $4.5 billion per year in added insurance premiums,” or approximately $137 in additional annual premium payments for a single person and $415 for family coverage, the NAM pointed out.

• Lost drug manufacturer rebates account for “a $5.2 billion increase in health care costs for self-insured employers and the 103.4 million workers they employ.”
• Christopher Whaley, associate director of the Center of Advancing Health Policy through Research at Brown University, raised this issue in his opening statement as well.

What should be done: The Health Resources and Services Administration recently announced a rebate model pilot program for drugs subject to both the Medicare Drug Price Negotiation Program and 340B.

• This is an important first step in increasing transparency and accountability in the 340B program, the NAM noted.
• The NAM “encourage[s] Congress to consider additional 340B reforms that would reduce health care costs for manufacturers and manufacturing workers,” Kuhns told the subcommittee.