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

U.S. manufacturers are reporting solid demand and ongoing expansion, but the same survey signals that cost pressures remain firmly in place. High energy prices and the new tariffs introduced under the Trump administration are cited as factors preventing even faster growth, suggesting that input costs are still eating into the benefits of a healthy order book.

For markets, the takeaway is that goods-sector inflation may be stickier than headline figures imply. When manufacturers face elevated energy and tariff-related costs, those expenses can eventually feed into wholesale and consumer prices, complicating the outlook for interest rate policy. It also matters for margins: companies with limited pricing power may absorb costs rather than pass them on.

What to watch next is whether order growth stays strong enough to offset these cost headwinds, and whether energy prices or tariff policy shift. Until then, the data point to an economy still expanding, but with an inflation problem that has not yet resolved.