Manufacturing in this country remains fairly stable, having registered an ISM Purchasing Managers’ Index reading in expansion territory for a ninth month in a row, with industrial production increasing 2.8% in Q3 and 2.2% year over year.
That comes in the face of a continued spiking of the consumer price index, which has increased at a rate of 3.7% year over year. While food prices have risen at an annual rate of 2.5%, energy prices have skyrocketed by 20.4%. That’s an issue that continues to affect manufacturing, with oil prices continuing to surge, reaching more than $110 per barrel in mid-October. This in turn has led to an increase in the producer price index, with producer goods jumping 2.6% in September, the largest monthly increase since tracking began in 2009. Core PPI, which strips energy out of the equation, rose 0.7% in September, a telltale sign that higher input costs are filtering across the economy as a whole. Core wholesale inflation has risen 5.0% year over year.
With average 30-year U.S. mortgage rates hitting a two-year high and standing above 7% for two months in a row, the construction sector is struggling. Total construction spending has remained relatively flat for about 3 years, falling 1.7% year over year recently (nonresidential construction rose 0.5% year over year while residential fell 4.8%). This comes as the number of single-family housing starts and completions have both begun to fall.
(Updated 10/26/26)
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