- Manufacturing demand is surging: U.S. durable goods orders rose 8.2% in 2025, signaling strong forward manufacturing activity.
- Manufacturing sector is expanding again: The ISM Manufacturing PMI reached 52.7 in March 2026, marking three consecutive months of expansion.
- Output has turned upward: U.S. industrial production reached its highest level since 2019, with manufacturing output now growing 2% higher in 2025 after years of contraction.
- Productivity is strengthening: Manufacturing labor productivity rose 1.9% in 2025, the largest annual gain since 2010, signaling improved efficiency and economies of scale.
- Tariffs are not driving inflation: Tariff-sensitive goods prices rose just 1.0% YoY, while inflation is concentrated in non-tradable sectors like housing, energy, and healthcare.
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