U.S. manufacturers say inflation is bad and not getting any better

U.S. manufacturers are caught in a paradox: business is growing, but so are their costs. According to the latest industry survey data, factory activity continues to expand, with new orders flowing in. Yet manufacturers report that inflation remains a persistent problem — not a fading one — with high energy prices adding to the cost of running production lines.

Layered on top of that are the new tariffs introduced under the Trump administration, which raise the price of imported components and materials. For manufacturers, these are input costs, and they tend to show up in the prices of finished goods. That helps explain why inflation in this sector looks sticky even as demand holds up.

For markets, the takeaway is that goods inflation may stay firmer than hoped, complicating the outlook for interest rate cuts. What to watch next: whether new orders keep outpacing cost pressures, whether energy prices ease, and whether tariff effects broaden into consumer prices. Those signals will shape how investors read both growth and inflation in the months ahead.