News

Some economists are questioning the accuracy of recent U.S. inflation data—and say it could have big economic implications (The Wall Street Journal, subscription).

What’s going on: “The Bureau of Labor Statistics, the office that publishes the inflation rate, told outside economists this week that a hiring freeze at the agency was forcing the survey to cut back on the number of businesses where it checks prices.”

• In the April inflation report, government statisticians had to use a less precise price-change measurement method than they had used previously.

Why it’s important: The staffing shortage poses questions about the accuracy of recent and coming inflation reports, economists say.

The details: To determine the inflation rate, hundreds of government staffers known as enumerators disperse across U.S. cities, checking—often at brick-and-mortar locations—how much businesses are charging for goods and services.

• Statisticians pull that data into the consumer price index, which shows how the cost of living is changing for Americans.
• If enumerators can’t find specific prices, they make educated guesses based on close substitutes.
• But in April, with the hiring freeze on, they often had to “base their guesses on less comparable products or other regions of the country—a process called different-cell imputation—much more often than usual, according to the BLS.”

The effect: In the April inflation data, 29% of price guesses—a percentage twice as high as any month in the past five years—were made using these less-accurate comparisons.

• One economist told the Journal: “We don’t know if this is a big issue or a small issue, but we just know that directionally, it’s making things worse.”

Americans are socking away a record amount in their retirement accounts (The Wall Street Journal, subscription).

The details: “The average savings rate in 401(k) plans rose to a record high 14.3% of income in the first three months of this year, according to a Fidelity Investments analysis of the millions of accounts it manages.”

• That’s almost as much as the 15% annual savings rate that financial advisors recommend.

Upward trend: Average savings rates have increased from 13.5% in 2020.

• Meanwhile, older savers are putting in more than younger ones: “At Fidelity, baby boomers saved 17.2% on average, while generation X and millennials put away 15.4% and 13.5%, respectively.”

More 401(k)s: “About 70% of the private-sector workforce now has access” to a 401(k)—and many more companies are using automatic enrollment to increase participation.

Still at risk: However, “About 40% of U.S. households are now at risk of being unable to maintain their standard of living in retirement, according to Boston College’s Center for Retirement Research.”

The NAM’s contribution: The NAM is helping more manufacturing workers gain access to 401(k)s through its Manufacturers Retirement & 401(k) Savings Plan, which allows many companies to participate in one 401(k) plan.

• Retirement benefits are a huge draw for prospective workers, and the NAM 401(k) plan makes it much easier for small and medium-sized manufacturers to offer them.
• Read our interview with one manufacturing leader who saw a huge benefit from moving to the NAM 401(k) plan—and find out what she learned in the process.

The spotlight is on Western Pennsylvania—and EQT Corp.’s Toby Rice (The Washington Post, subscription).

What’s going on: The region’s plentiful natural gas is making it a crucial location as energy demand surges thanks to artificial intelligence. At the center of things is Toby Rice, president and CEO of energy company EQT Corp., the largest natural gas producer in the Appalachian Basin.

• “The size of [AI’s energy appetite] … it’s crazy,” Rice told opinion writer Salena Zito. “We are hearing estimates for power demand for AI that’s anywhere [from] 50 to 75 gigawatts of power, which is the equivalent of the power needed to power 10 to 15 New York Cities.”
• EQT is expected to be among the few natural gas providers in contention to support the switchover of the Homer City Generating Station, formerly Pennsylvania’s largest coal-fired power plant, “to natural gas to power an adjacent AI data center.”

From baseball to energy: Massachusetts native Rice wanted to make his career in professional baseball, but after he was passed over by Major League Baseball in college, his father suggested he go into the oil and gas industry.

• After moving to Texas, Rice started out working on an oil rig and eventually founded his own company, Rice Energy.
• “There was a lot of sweat along the way—he left Texas for Appalachia, and slowly grew Rice Energy from a no-name company to a top 10 producer of natural gas in the country.”
• It merged with EQT in 2017, creating America’s biggest independent producer of natural gas.

AI revolution—and opposition: “This is the biggest gas field in the world. This is the biggest energy source,” Rice told the Post. “Pittsburgh has powered, has been the ground zero, for the industrial revolutions that have taken place in this country. This AI revolution that’s taking place—no different.”

• However, AI growth has a sizable hurdle in its way in the form of opposition to natural gas.
• Said Rice: “We’re going to do everything we can to make sure they have all the energy they need to meet their AI aspirations. But we should still have the ability to build more infrastructure here.”

President Trump on Tuesday evening signed a proclamation that doubled Section 232 tariffs on steel, aluminum and derivative products from 25% to 50%.

Why it matters: The move marks a significant escalation in trade policy, with no exemptions or exclusions—and has immediate implications for manufacturers relying on imported metals.

The details: The new rates took effect at 12:01 a.m. EDT on June 4. There is no exemption for goods on water.

• The proclamation builds on a Feb. 10 executive order that reinstated 25% tariffs on imports of steel, raised tariffs on aluminum from 10% to 25%, revoked all country exemptions and quotas, terminated all general production exclusions granted by the Department of Commerce and rescinded the department’s authority to process any new or renew any product exclusion requests.
• Unpublished annexes are expected to provide more clarity on product scope. Guidance from U.S. Customs and Border Protection is anticipated in the coming days.

Zoom out: President Trump says domestic production capacity remains underutilized and foreign producers continue to flood the U.S. market with low-priced goods—undercutting the competitiveness of the U.S. steel and aluminum industries.

• “Increased tariffs will more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminum in the U.S.,” the proclamation reads.

Between the lines: The U.K. narrowly avoids higher tariffs—for now. Steel and aluminum from the U.K. remain at 25%, contingent on compliance with the U.S.–U.K. Economic Prosperity Deal. Rates could rise to 50% on or after July 9 if the U.K. falls short.

“Stacking” reshuffled: The June 3 proclamation shakes up the May 2 tariff “stacking” executive order with key changes:

• Canada and Mexico: Products subject to new 50% Section 232 steel and aluminum tariffs are not subject to International Emergency Economic Powers Act fentanyl tariffs.
• IEEPA “reciprocal” tariffs: For countries facing “reciprocal” tariffs, companies must pay the 10% on all non-aluminum, non-steel content—or face “severe consequences” for underreporting.

The NAM says: Amid ongoing trade negotiations, manufacturers continue to press for zero-for-zero tariff outcomes with top export markets, so they have the certainty they need to plan, hire and compete—while also gaining access to the globally sourced raw materials and critical minerals necessary to make things in America.

• As NAM President and CEO Jay Timmons has stated, “If we see more trade agreements, tax reform legislation and more regulatory certainty—as part of our comprehensive manufacturing strategy—manufacturers win. And when manufacturers win, America wins.”

What’s next: Even at full throttle—every machine running, every job filled—the industry can only produce 84% of the inputs necessary to meet demand. That means at least 16% of manufacturing inputs must be imported to grow domestic manufacturing. Stay tuned for a new proposal the NAM is announcing tomorrow morning.

Business activity in the U.S. manufacturing sector declined for the third consecutive month in May—and at a slightly faster pace than in April (Institute for Supply Management).

What’s going on: The ISM Manufacturing Purchasing Managers Index edged down to 48.5 from 48.7 in April, reflecting continued weakness in demand and output.

• The New Orders Index rose slightly to 47.6 but remained in contraction for the fourth straight month. Only two of the six largest manufacturing sectors—petroleum and coal products and machinery—reported increased new orders.
• The Production Index ticked up to 45.4, still signaling contraction but at a slower pace.

Tariffs: The New Export Orders Index fell sharply to 40.1, the fastest pace of contraction since the COVID-19 pandemic, driven by slower global growth and new retaliatory tariffs on U.S.-manufactured goods.

• The Imports Index plunged to 39.9, as tariff-related price increases softened demand.

Jobs: The Employment Index rose modestly to 46.8 but remained in negative territory, suggesting continued job losses in manufacturing, though at a slower rate. Companies cited hiring freezes, layoffs and attrition amid uncertainty about future demand.

Prices: The Prices Index dipped slightly to 69.4, but remained elevated as steel, aluminum and other tariffed imports drove raw materials costs higher.

Inventories: Inventories fell back into contraction, dropping to 46.7 after a brief expansion in April, as firms stopped pulling forward deliveries and worked through earlier stockpiles built up ahead of tariff hikes.

With a large number of Americans still lacking reliable internet access, some states are looking to space to fix the problem (The Wall Street Journal, subscription).

What’s going on: “From Maine to Nevada, states are starting to help some of the 24 million Americans who lack reliable broadband pay for satellite internet, rather than focusing such aid primarily on fiber connectivity as they have in the past.”

• Providers including Amazon have launched new endeavors to increase internet access worldwide, and they could benefit from these states’ push. Amazon’s Project Kuiper, for example, launched its first operational satellites in April and expects to deploy thousands more in the coming years.

The details: “Louisiana set aside $28.7 million of the funds it expects from a federal broadband subsidy program for satellite service, and Nevada has agreed to spend $12.7 million of its funds from the same program on Project Kuiper to serve about 4,400 rural addresses.”

• The Biden administration’s $42.5 billion Broadband Equity, Access and Deployment Program favored fiber over satellite, but the Commerce Department announced earlier this year it will overhaul the program to make it “tech-neutral.”

Why didn’t they do it sooner? Some officials have been reluctant to subsidize satellite internet because it provides slower service than fiber. It’s also susceptible to more frequent outages and requires satellite updates every few years.

• But it’s also quicker and less expensive to implement. (For some remote locations, the price tag for laying fiber can go well into six figures for a single home.)

A stopgap solution: To meet needs while BEAD is rejiggered, Maine and South Carolina have started state-funded programs that subsidize satellite broadband for some rural addresses—but only from a specific provider.

• Texas has a similar program and has accepted applications from providers, and following the Commerce Department’s BEAD announcement, West Virginia is considering spending some of its funds on satellite internet, too.

China dominates the global battery mineral market, from sourcing and mining to production, according to the U.S. Energy Information Administration.

What’s going on: “China imported almost 12 million short tons of raw and processed battery minerals, accounting for 44% of interregional trade, and exported almost 11 million short tons of battery materials, packs and components, or 58% of interregional trade in 2023, according to regional UN Comtrade data.”

• These minerals’ importance will only increase as the appetite for electric vehicles and renewable energy technologies grow.
• However, as the NAM recently told the Commerce Department, Section 232 tariffs will not increase domestic sourcing of these critical minerals or decrease U.S. reliance on China for them.
• Instead, to shore up domestic critical minerals supply, the U.S. needs permitting reform, incentives for producers and enhanced trade relationships with partners other than China.

Mining and production: China either produces domestically or has large ownership stakes in companies that produce these minerals.

• In 2023, the country produced about 18% (33,000 short tons) of the world’s mined lithium, and Chinese firms “control 25% of the world’s lithium mining capacity.”
• Chinese companies also have sizable investments in mining operations in the “lithium triangle,” an area in Chile, Argentina and Bolivia that holds half of the world’s lithium stores.
• “China produced 79%, or 1.27 million short tons, of the world’s natural graphite in 2024, according to the U.S. Geological Survey.”
• Chinese firms own 80% of cobalt production in Congo-Kinshasa, the location of more than 50% of the world’s cobalt production.

Trade: After production, raw battery minerals are exported—and in 2023, China accounted for nearly half (46%) of global raw battery mineral import trade.

• That year, the world’s largest lithium producer, Australia, sent almost all its lithium exports to China.

Processing: China has the global critical minerals processing market cornered, too.

• It processes more than 90% of the world’s graphite.
• In 2022, “Chinese companies accounted for over two-thirds of the world’s cobalt and lithium processing capacity.”
• The next year, China imported 20% of global processed battery minerals, mostly African cobalt. Also in 2023, China exported 58% of the world’s processed battery minerals, primarily synthetic graphite, elsewhere in Asia and to Oceania.

Battery materials manufacture and trade: “China accounted for 53% of the world’s battery material export trade in 2023.”

• In 2022, the country made 85% of the world’s anodes, 82% of its electrolytes, 74% of its separators and 70% of its cathodes.
• In 2023, China controlled almost 85% of “battery cell production capacity by monetary value.”

If the administration wants manufacturing in the U.S. to succeed, it needs a planned strategy—one that includes extending the pro-growth provisions from the 2017 Tax Cuts and Jobs Act and gets the tax bill containing most of President Trump’s legislative agenda passed quickly. That was the message from NAM President and CEO Jay Timmons on Fox Business’ “Maria Bartiromo’s Wall Street” last week.

What’s going on: “Manufacturers were very excited that we had a new president in January who said, ‘We’re going to get this … [tax] bill done. We’re going to extend the cuts from 2017,’” Timmons told show host Maria Bartiromo on May 30 on location at the 2025 Reagan National Economic Forum in Simi Valley, California. “But now we have the uncertainty … that really requires this bill to be done as soon as possible. It’s urgent now.”

• The Senate returned this week from its Memorial Day recess with the legislative agenda as its top priority.
• The GOP hopes to extend the TCJA tax cuts permanently, while Democrats want the nonpartisan parliamentarian of the United States to determine whether an extension without an end date would violate the Senate’s Byrd rule.

Why it’s important: More than 85% of manufacturers in the U.S. say Congress must preserve the TCJA’s provisions in response to trade uncertainty, according to the NAM’s latest Manufacturers’ Outlook Survey, which Bartiromo cited.

• At risk if it doesn’t preserve the measures: some 6 million jobs and a $1 trillion economic hit.

Certainty on trade: But more is needed, Timmons said.

• The trillions of dollars in U.S. investments secured recently by the administration are definite wins—but only “as long as we have that strategy in place,” which, in addition to sound tax policy, includes regulatory certainty.
• “Trade is going to be critical,” Timmons told Bartiromo. “We need to have the certainty around whatever the rules of the game are regarding our trading practices and the work we do with our trading partners, because if we don’t have the right policies in place, and imports do end up costing us a lot of money for critical inputs for manufacturing, we can’t build those facilities.”
• For every dollar of manufactured inputs imported to the U.S., “we get $1.40 of output,” Timmons went on. “And so if we tariff everything the same, we may be in a little bit of trouble when it comes to making those investments.”

The latest resources for the NAM’s tax campaign may be found on the “Manufacturing Wins” webpage.

Antora Energy has an energy storage solution that could transform American manufacturing.

Antora builds thermal batteries that draw in locally produced electricity when it’s cheap and plentiful, converting it into heat stored in solid blocks of carbon. That energy can be delivered 24/7 to manufacturers as affordable, reliable energy. It’s a solution that is both modular and scalable, capable of serving small and large manufacturers alike.

• “We’re taking local energy from sources that are already near factories, at times when nobody else wants it and it would otherwise be wasted, and delivering it to American manufacturers,” said Antora Chief Operations Officer Justin Briggs. “It helps the factory become more competitive and stabilizes the local grid.”

Promoting U.S. energy: Antora’s batteries are manufactured in the U.S., using a domestic supply chain that avoids reliance on critical minerals (which must often be imported from China).

• The core of the battery is a form of inexpensive, low- to medium-grade graphite that is often a byproduct of coal mining or petroleum refining—an abundant resource across the U.S.
• “This is an opportunity to build a new technology class in the United States, with American materials and American supply chains,” said Briggs. “From the very beginning, we can build in America to support U.S. manufacturers.”

Creating jobs: The company is excited about the opportunity to create jobs in the United States—both at Antora itself and at the factories it supports.

• “We’re currently operating our first factory—a thermal battery gigafactory in San Jose, California—but that’s just the beginning,” said Briggs. “We’re already looking at a second factory, and more beyond that. We’re talking about being able to create a tremendous number of jobs around manufacturing hubs in the U.S.”

Leading a renaissance: Antora sees the chance not only to build a new industry, but also to help support the next generation of American manufacturing and global technological leadership.

• “[The U.S. has] a chance for a renaissance—to tap into these domestic, abundant energy resources and support manufacturing industries, from concrete and steel to chips and data centers,” said Briggs. “These are all sectors that need energy, and we can supply it cost-effectively.”

Overcoming hurdles: Briggs notes that electricity markets have been around for a long time—and as a result, regulatory hurdles designed by long-ago policymakers can get in the way of this new technology.

• “The rules that govern electricity markets were not designed to contemplate scenarios like this one,” said Briggs. “Thermal batteries bring huge benefits to industry and the electric grid, but it can be hard to do from a regulatory perspective. We’re working with regulators to open up markets to support these great project opportunities.”
• “We’re just trying to make sure there aren’t antiquated rules in the way, so we can help make American industry more competitive.”

The bottom line: “This is an opportunity to drive a resurgence in American manufacturing through cheap energy,” said Briggs. “We’re putting this energy to use to repower American industry.”

The U.S. Supreme Court has put limits on a procedural requirement that has become a major roadblock for infrastructure and energy projects: environmental review under the National Environmental Policy Act.

The background: The predecessor of substantive statutes like the Clean Water and Clean Air Acts, NEPA is the “the single most litigated environmental statute,” NAM Vice President and Deputy General Counsel Erica Klenicki told us.

• In this case, local government and environmental groups brought a NEPA challenge to the Surface Transportation Board’s approval of an 88-mile rail line in Utah’s Uinta Basin, which would connect to the national rail network and carry crude oil to refinery markets along the Gulf Coast.
• The board approved the project after issuing a comprehensive, 3,600 page environmental impact statement under NEPA.
• But that wasn’t enough—the D.C. Circuit blocked the board’s approval, ruling that its exhaustive analysis failed to consider the repercussions of more oil production made possible by the rail line. It contended that the board should have considered the potential impact of increased oil refining on Gulf coast communities thousands of miles away—even though the board had no power at all to control for those effects.

The issue: The NAM filed an amicus brief in the case, urging the court to reject the premise adopted by the D.C. Circuit—that NEPA requires agencies to analyze the effects of upstream or downstream projects over which they do not exercise regulatory authority.

• Yesterday, the justices ruled 8–0 (Justice Neil Gorsuch recused himself) that the board did not have to consider such sweeping effects when evaluating whether to approve a project.

What they said: “NEPA is a procedural cross-check, not a substantive roadblock,” Justice Brett Kavanaugh wrote . “The goal of the law is to inform agency decision-making, not to paralyze it.”

• “Courts should review an agency’s [environmental impact statement] to check that it addresses the environmental effects of the project at hand. The EIS need not address the effects of separate projects,” Kavanaugh wrote. “In conducting that review, courts should afford substantial deference to the agency as to the scope and contents of the EIS.”

The NAM’s advocacy: The NAM has been a tireless proponent of limiting regulatory overreach, especially the out-of-control permitting process that strangles important new infrastructure and energy projects.

• “The congressional intent behind NEPA when it was passed was to make sure a specific project could be reviewed for its environmental impact—not to slow down progress on important economic growth,” said NAM Director of Energy and Resources Policy Michael Davin. “The U.S. should learn from other nations and review projects for environmental impacts without taking years and years to approve them.”