First, the challenging news for manufacturers. We’ll start with U.S. real GDP growth, which grew at an annual rate of 2.0% in Q1 of this year. Granted, that’s higher than the 0.5% increase in Q4 of 2025. The Congressional Budget Office is forecasting a modest 2.2% increase this year, as is the IMF. (Some others, such as the Conference Board and Morgan Stanley, forecast GDP growth below 2%, while others, such as Goldman Sachs and Vanguard, forecast growth higher than the CBO’s 2.2% increase.) Of course, much of the drag on growth is due to spiraling oil prices. As of early May, a barrel of crude oil was trading for between $105 and $115 (as always, subject to daily volatile swings). This, in turn, has led to a dramatic spike in the national average price of a gallon of regular gas, to $4.46. Fuel oil has jumped 44% over the past year, gasoline 19%, and natural gas 14%. Travel costs have risen 15% over the past month. And daily staples such as beef and coffee have seen double-digit increases over the past year.
While unemployment has remained unchanged at 4.3% since February, job growth in Q1 of this year stood at a net total of just over 200,000. Growth in healthcare, construction, and transportation and warehousing has been offset by declines in manufacturing (down 2,000 jobs), financial activities, and the federal government (which has lost an estimated 70,000 jobs in 2026).
But there is good news. First, ISM’s Purchasing Manager Index has been in expansion territory—albeit barely—for the past two months. Indeed, new orders for manufactured goods have risen in 4 of the past 6 reportable months. Second, at least for many U.S. manufacturers who are helping build out a new economic linchpin, driven by massive AI investments, we’ve seen remarkable growth in data centers, which house the computer infrastructure for Industry 4.0. This is no small potatoes: McKinsey has estimated that global data center outlays could reach $7 trillion by 2030—and that is good for, among others, companies in the electrical equipment, computer and electronic product, fabricated metal, HVAC, wire and cable, and civil construction materials space.
(Updated 5/4/26)
Return to Economic Indicators
