The Federal Reserve’s Fifth District manufacturing index inched up to 5 in July 2026 from 4 in June, falling short of market expectations for a reading of 9. Overall manufacturing activity was broadly stable, as stronger shipments (8 vs. 4) and a rebound in employment (2 vs. -1) offset a slowdown in new orders growth (5 vs. 8). Local business conditions improved markedly, with that index climbing to 10 from -1.
On the price front, cost pressures eased: the growth rate of prices paid decelerated to 6.08% from 6.99%, while the growth rate of prices received moderated to 3.96% from 4.57%. Looking ahead, firms anticipate that inflationary pressures will continue to moderate over the next 12 months. Even so, optimism weakened somewhat, as expectations for local business conditions (19 vs. 22), shipments (33 vs. 36), and new orders (31 vs. 33) all declined, though they remained solidly in positive territory.
