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The Producer Price Index for final demand (also known as wholesale prices) stayed the same in February, after rising 0.6% in January. Over the year, producer prices moved up 3.2%, coming in lower than expectations. Prices for final demand excluding foods, energy and trade services rose 0.2%, after increasing 0.3% in January. Prices for these goods advanced 3.3% from February 2024.

In February, prices for final demand services declined 0.2%, which was offset by prices for final demand goods growing 0.3%. Two-thirds of the increase in the final demand goods index can be attributed to prices for chicken eggs, which soared 53.6%. Meanwhile, prices for gasoline fell 4.7% over the month. The index for final demand goods, excluding foods and energy, rose 0.4%, up from 0.2% in January.

Processed goods for intermediate demand rose 0.5% in February, down from the 1.0% jump in January. More than 40% of the increase could be attributed to a 0.3% rise in the index for processed materials less foods and energy. Prices for processed foods and feeds and for processed energy goods also advanced, 2.0% and 0.5%, respectively. Over the year, the index rose 0.3%, down from the 0.9% increase in January.

Meanwhile, prices for unprocessed goods for intermediate demand rose 1.3% in February, the third consecutive monthly increase. The rise was driven by a 5.1% boost in prices for unprocessed foodstuffs and feedstuffs. Unprocessed nonfood materials less energy rose 2.2%. Prices for unprocessed goods for intermediate demand surged 10.5% from February 2024, the largest increase since December 2022.

Consumer prices increased 0.2% over the month and 2.8% over the year in February, slowing from the 3.0% over-the-year rise in January and coming in lower than expectations. Core CPI, which excludes more volatile energy and food prices, edged up to a 3.1% over-the-year increase and rose 0.2% over the month, down from 0.4% in January.

Shelter rose 0.3% over the month, accounting for nearly half of the monthly increase of the all-items index, and 4.2% over the year. Energy costs grew 0.2% over the month in February, with utility gas service leading the increase, rising 2.5%. Meanwhile, prices for gasoline fell 1.0%, while electricity prices grew 1.0% from January. Although prices for transportation services edged down 0.8% over the month, they were still up 6.0% over the year, with motor vehicle insurance leading the increase, surging 11.1% over the year.

Food prices continue inching up, rising 0.2% over the month and 2.6% over the year in February. The food at home index stayed the same over the month, but the indexes for meats, poultry, fish and eggs rose 1.6% in February. Driven by the bird flu outbreak, the index for eggs alone increased 10.4% over the month and 58.8% over the year. Food away from home rose 0.4% in February and was up 3.7% over the year.

As the over-the-year headline inflation rate remains elevated, markets are anticipating that the Federal Open Market Committee will keep rates steady at its meeting this week. This expectation was confirmed further in Federal Reserve Chairman Jerome Powell’s recent comments at an economic forum in New York where he said that the Fed is in no hurry to reduce its interest rate target.

Job openings for manufacturing increased by 31,000 to 462,000 in January. The gain was concentrated primarily in durable goods, up 26,000, while nondurable goods job openings rose by a smaller 4,000. The manufacturing job openings rate edged up 0.2% to 3.5% in January but declined from 4.1% the previous year. The rate for durable goods manufacturing increased 0.4% to 3.9%, while it inched up 0.1% to 2.9% for nondurable goods.

In the larger economy, the number of job openings rose to 7.7 million, an increase of 232,000 from the previous month but a decrease of 728,000 from the previous year. The job openings rate increased to 4.6%, up from 4.5% in December but down from 5.1% last year. While this data reflects an overall labor market that has cooled significantly, steady hiring and low layoffs suggest the labor market remains solid.

The number of hires in the overall economy was relatively unchanged at 5.4 million in January but dropped 179,000 from the previous year. The hires rate for the overall economy stayed the same in January at 3.4%. Meanwhile the hires rate for manufacturing increased 0.2% to 2.6%. The hires rate for durable goods rose 0.5% to 2.5%, but fell 0.2% to 2.8% for nondurable goods.

Total separations, which include quits, layoffs, discharges and other separations, rose 170,000 from December to 5.3 million but dropped 177,000 from the previous year. The total separations rate inched up 0.1% to 3.3% for the overall economy and stayed the same for manufacturing at 2.5%. Within that rate, layoffs and discharges rose by 6,000 in January for manufacturing, while quits increased by 5,000. Despite the gain, the quit and layoff rates continue to remain lower for manufacturing than the total nonfarm sector.

At an 17�Թ�����-sponsored breakfast at energy conference CERAWeek in Houston on Tuesday, Interior Secretary Doug Burgum assured 17�Թ����� board members that the administration has a manufacturing strategy in place, particularly regarding permitting, infrastructure development and manufacturers’ access to reliable and affordable energy.

A comprehensive strategy: In his remarks opening the event, 17�Թ����� President and CEO Jay Timmons discussed the five-pillar, comprehensive manufacturing strategy that the 17�Թ����� has been urging the Trump administration to implement.

• “Secretary Burgum, I just want you to know we’ve been making the case for a coordinated, comprehensive manufacturing strategy to give us the predictability and the certainty that manufacturers need to plan, to invest and to hire here in the United States, and that strategy has five pillars—goals that I know you share,” Timmons said.
• The goals are making the 2017 tax reforms even more competitive and permanent; securing regulatory certainty; expediting permitting reform to unleash American energy dominance; increasing the talent pool; and implementing a commonsense trade policy—to expand access to markets while keeping manufacturing competitive.
• Timmons warned of the dire consequences the U.S. economy and manufacturers will face if lawmakers fail to extend the 2017 tax reforms. Among them: the loss of some 6 million American jobs, according to a recent .

An economic backbone: “Manufacturing, as you know, has been the backbone” of the economy, Burgum said. “President Trump ran on bringing manufacturing back to the United States. His policies are driving to do that.”

Unleashing U.S. energy: Timmons praised President Trump for his day-one lifting of the previous administration’s liquefied natural gas export permit moratorium.

• The “recent 17�Թ����� LNG found that the U.S. LNG export industry could support more than 900,000 jobs and add $216 billion to GDP by 2044,” he said.
• Said Burgum: “We are looking at everything to try to, for the first time, [have] streamlined government. … [and] it’s happening. It’s happening quickly.”

“Optimistic about the future”: The administration’s commitment to “low taxes and cutting red tape”—on which President Trump’s recently created National Energy Dominance Council is focusing—“are all things that are going to help lower your cost and create opportunities,” Burgum continued.

• “Capital is flowing to the U.S. at record levels. … I’m very optimistic about the future.”

The last word: At another event at CERAWeek, a roundtable sponsored by Natural Allies for a Clean Energy Future, Timmons summed up manufacturers’ commitments.

• “Yes, we care about developing our natural resources to power our economy, certainly through manufacturing, but it’s also about people, here in the United States and around the world,” said Timmons. “The energy that we export, that is soft power for the United States. That expands our influence. That allows us to export not only our energy, but also our values. So I think that’s very, very important for our future.”

New orders for manufactured goods rose 1.7% in January, after two months of decline. When excluding transportation, new orders edged up 0.2%. Orders for durable goods jumped 3.2%, following a 1.8% decrease in December. Year to date, durable goods orders are up 4.3%. Nondurable goods orders ticked up 0.3% in January after increasing 0.5% in December. Nondurable goods orders are up 2.8% year to date.

New orders for nondefense aircraft and parts led the increase in durable goods by leaping 93.9%, after shrinking 28.9% last month. In January, the largest monthly decrease occurred in ships and boats, which declined 11.0%. The largest over-the-year changes also occurred in nondefense aircraft and parts (up 122.2%) and ships and boats (down 13.5%).

Factory shipments increased 0.4% in January, after rising 0.6% in December. Shipments excluding transportation edged up 0.2%, the same as the previous month. Shipments for durable goods improved 0.5% in January, down from 0.8% in December but up 2.6% year to date. Meanwhile, nondurable goods shipments rose 0.3% in January and are up 2.8% year to date.

Unfilled orders for all manufacturing industries rose 0.2% in January, following a 0.3% decrease in December. Inventories rose 0.1%, while the inventories-to-shipments ratio remained the same at 1.46. The unfilled orders-to-shipments ratio for durable goods decreased to 6.85 from 6.93 in December.

In February, U.S. manufacturing growth accelerated notably. The S&P Global U.S. Manufacturing PMI rose to 52.7 in February from 51.2 in January, the second consecutive month in expansion territory and the highest rate of growth since June 2022. Production improved to the quickest pace since May 2022, while new orders grew at the fastest rate in a year. Nevertheless, there’s evidence that the expansion for these components was partially due to advanced purchases ahead of price increases and potential supply chain disruptions once tariffs are imposed. Furthermore, the sector’s growth in February was coupled with a drop in optimism, as companies expressed concerns over tariffs and other administration policies.

Input costs increased in February to the highest level since November 2022, as suppliers started adjusting prices in response to tariffs. Faced with heightened input costs, output charges rose for the fourth consecutive month and at a steeper degree to the highest level in two years.

The growth in new orders was led by increased client restocking, as customers try to get ahead of tariffs. Global demand continued to drag on the overall orders reading, with new export sales dropping in February for the ninth consecutive month. Backlogs declined for a 29th consecutive month and at a faster rate, enabled in part by increased labor capacity. Meanwhile, February marks the fourth consecutive rise in the employment reading, but growth was modest.

In February, the global manufacturing sector moved further into expansion territory to 50.6, an eight-month high. Three of the five PMI components were at levels consistent with expansion, as output and new orders rose for the second month in a row, and suppliers’ delivery times lengthened. On the other hand, employment and stocks of purchases continued to decline.

India, Indonesia, Brazil and the U.S. had the highest PMI readings in February, while China’s PMI also improved. On the other hand, the contraction in the Eurozone, Japan and the U.K. persisted.

The improvement in conditions led confidence to rise to a nine-month high. The expansion in output was driven by intermediate goods and consumer goods, which had the fastest growth. Meanwhile, investment goods stabilized after eight consecutive months of contraction. Increased output was also supported by growth of new orders, which rose at the quickest pace since March 2022. On the other hand, international trade declined for the ninth consecutive month, but the rate of contraction was mild.

In February, manufacturing employment declined for the seventh consecutive month but at a slower rate than the prior month. Employment losses in China, Eurozone, the U.K., Canada and Mexico were offset only partially by growth in the U.S., Japan, Brazil and India. Input costs and selling prices continued to rise and at faster rates than in January, reaching 25- and eight-month highs, respectively.

In February, the U.S. manufacturing sector expanded for the second consecutive month but at a slower pace, with the ISM Manufacturing® PMI falling to 50.3% from 50.9% the prior month. Customer demand weakened, output stabilized and inputs revealed signs of suppliers’ difficulty meeting accelerated delivery requests to head off increased tariff rates. The New Orders and Employment Indexes dropped back into contraction territory, declining to 48.6% and 47.6%, respectively. Production remained in expansion territory but weakened to 50.7%, 1.8 percentage points lower than January. Meanwhile, inventories (49.9%) and backlog of orders (46.8%) contracted at a slower pace in February.

The New Orders Index contracted after expanding for three consecutive months, a 6.5 percentage point drop from January. The index hasn’t shown consistent growth since a 24-month streak of expansion ended in May 2022, and respondents noted a weakening in demand, with four of the six major sectors—petroleum and coal products; machinery; chemical products; and food, beverage and tobacco products—reporting an increase in new orders.

The Production Index expanded for the second consecutive month. Prior to the past two months, the last time the index registered above 50% occurred in April 2024. Of the six largest manufacturing sectors, three—food, beverage and tobacco products; transportation equipment; and chemical products—reported increased production.

The Employment Index decreased 2.7 percentage points in February, returning to contraction after expanding for a single month. Of the six largest manufacturing sectors, only one—transportation equipment—reported increased employment. Companies continued to reduce headcounts through layoffs, attrition and hiring freezes.

The Prices Index rose 7.5 percentage points to 62.4%, indicating raw materials prices increased for the fifth straight month in February, driven by the dramatic rise in commodity prices as a result of new and potential tariffs. Steel, aluminum, copper, food elements, plastics and natural gas registered increases. More than 31% of companies reported paying higher prices, up from 21% in January.

Nonfarm payroll employment increased by 151,000 in February, slightly below the expectation of 170,000. In addition to the February gain being weaker than expected, January and December’s job gains were revised downward by a combined 2,000 jobs, with January’s gain revised downward by 18,000 and December’s gain revised upward by 16,000. The 12-month average stands at 162,250 job gains per month. The unemployment rate ticked up 0.1% to 4.1%, while the labor force participation rate edged down 0.2% to 62.4%.

Manufacturing employment rose by 10,000, but the January gain of 3,000 was revised downward to a loss of 5,000 jobs. The most significant gains in manufacturing in February occurred in motor vehicles and parts, which added 8,900 jobs over the month, recovering some of the 10,400 jobs lost in January. Meanwhile, the most significant losses occurred in computer and electronic product manufacturing, which shed 2,700 jobs over the month.

The employment-population ratio fell 0.2% to 59.9% and is down a slight 0.2 percentage points from a year ago. Employed persons who are part-time workers for economic reasons increased by 460,000 to 4.94 million and are up from 4.37 million in February 2024. Native-born employment is up 284,000 over the month and 1,544,000 over the year. Meanwhile, foreign-born employment is down 87,000 over the month but still up 685,000 over the year.

Average hourly earnings for all private nonfarm payroll employees rose 0.3%, or 10 cents, reaching $35.93. Over the past year, earnings have grown 4.0%. The average workweek for all employees and manufacturing employees stayed the same at 34.1 hours and 40.1 hours, respectively.

In his first address to Congress in his second term, President Trump made it clear that tariffs are not just a temporary tool, but a fixture of his administration’s trade policy. The president discussed his vision for an “America First” strategy, which includes the tariffs that went into effect and .

In his words: “Deals are being made,” he said. “That’s a combination of the election win and tariffs. It’s a beautiful word, isn’t it?”

• “If you don’t make your product in America … you will pay a tariff and, in some cases, a rather large one. Other countries have used tariffs against us for decades, and now it’s our turn to start using them against those other countries.”
• “On average [according to the president], the European Union, China, Brazil, India, Mexico and Canada … and countless other nations charge us tremendously higher tariffs than we charge them. It’s very unfair.”
• “[On April 2,] reciprocal tariffs kick in, and whatever they tariff us, other countries, we will tariff them…If they do nonmonetary tariffs to keep us out of their market, then we will do nonmonetary barriers to keep them out of our market.”

On Canada and Mexico: “[W]e have very large deficits with both of them. … We pay subsidies to Canada and to Mexico of hundreds of billions of dollars. And the United States will not be doing that any longer. We are not going to do it any longer.”

• “Tariffs are about making America rich again and making America great again, and it is happening, and it will happen rather quickly. There will be a little disturbance, but we are OK with that.”

The 17�Թ�����’s take: Ahead of the speech, 17�Թ����� President and CEO Jay Timmons pointed out in a that manufacturers—especially those with thin margins—are already feeling the pressure from new tariffs. “The stakes couldn’t be higher for manufacturers right now,” he said. The 17�Թ����� highlighted some examples after the tariffs went into effect yesterday from both small and large manufacturers:

• A power-engineering manufacturer faces $25 million in additional costs from the Mexico tariffs alone, impacting the ability to supply U.S. utilities and industrial customers.
• A major consumer goods manufacturer is looking at $231 million new costs from tariffs from Mexico and Canada.
• A small copper manufacturer was forced to turn back 388,000 pounds of copper at the Canadian border when tariffs took effect, with future imports costing an extra $50,000 per truckload.

Comprehensive manufacturing strategy: “To mitigate the adverse effects of today’s tariffs,” Timmons said, “President Trump and Congress [need] to implement a that would create predictability and certainty to invest, plan and hire.”

• That strategy should include making President Trump’s 2017 tax reforms permanent and more competitive, securing regulatory certainty, expediting permitting reform to unleash American energy dominance and key manufacturing projects, increasing the talent pool and implementing a commonsense trade policy, Timmons added.
• In recent weeks, including with the , Timmons has been raising the alarm on the need to move now on preserving and extending the 2017 tax reforms in the face of the uncertainty and price pressures.

The bottom line: “Building things in America only works if we can sell them around the world,” said Timmons. He added this morning: “That’s why we’re urging President Trump and Congress to provide greater predictability with a phase-in period for manufacturers to adjust to new trade realities, while also establishing clear exemptions for critical inputs, enabling reciprocity in manufacturing trade.”

• “President Trump can make American manufacturing greater than ever before by negotiating a ‘zero for zero’ tariffs manufacturing trade deal with our major trading partners,” Timmons said.

Developing: This morning on , Commerce Secretary Howard Lutnick hinted publicly that he has heard the 17�Թ����� and the industry’s urging for relief from tariffs on Canadian and Mexican imports for products that comply with the U.S.–Mexico–Canada Agreement—a signature achievement of President Trump’s first term.