US Fifth District Manufacturing Unexpectedly Declines

The Federal Reserve’s Fifth District manufacturing index fell to -2 in September 2026, marking its first negative reading in six months, down from 4 in August and contrasting with market expectations of an expansion in activity at 5. Both shipments and the volume of new orders fell into negative territory, to -5 and -6, respectively, while the order backlog deteriorated further, falling to -10 from -7. Meanwhile, the employment index rose to 7 from -2 in the previous month. Over the next six months, expectations for shipments (33 vs 26) and the volume of new orders (32) remained firmly in expansionary territory, although sentiment weakened for capital expenditures (-1 vs 4) and raw material inventories (-1 vs 3). Prices paid and received are expected to decline over the next 12 months, while employment expectations dropped notably to 8 from 20. Meanwhile, the future local business conditions index continued to decline, falling to 10 from 16.

The Federal Reserve’s Fifth District manufacturing index edged down to 4 in August 2026 from 5 in July, remaining well below market expectations of 7. Manufacturing activity was little changed during the month, as shipments increased to 11 from 8, while new orders declined to 3 from 5. Backlogs of orders (-7 vs 4) and capital expenditures (-5 vs 0) both swung into negative territory, while employment fell to -2 from 2. Meanwhile, the average growth rates of prices paid (6.22 vs 6.08) and prices received (4.09 vs 3.96) increased. The local business conditions index also declined to 4 from 10 in July. Over the next six months, firms remained relatively optimistic, with future new orders edging up to 32 from 31, while shipment expectations eased to 26 from 33. Employment expectations rose to 20 from 15, while expected growth in prices paid and received moderated. Meanwhile, the future local business conditions index continued to decline, falling to 16 from 19.

The Federal Reserve's Fifth District manufacturing index edged up to 5 in July 2026 from 4 in June, remaining well below market expectations of 9. Manufacturing activity was broadly stable during the month, as stronger shipments (8 vs. 4) and a rebound in employment (2 vs. -1) offset slower growth in new orders (5 vs. 8). Local business conditions improved sharply, with the index rising to 10 from -1. On the price front, cost pressures eased, as the growth rate of prices paid slowed to 6.08% from 6.99%, while prices received moderated to 3.96% from 4.57%. Looking ahead, firms expect inflationary pressures to moderate over the next 12 months. However, optimism softened, with expectations for local business conditions (19 vs. 22), shipments (33 vs. 36), and new orders (31 vs. 33) all declining, though remaining firmly in positive territory.