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U.S. manufacturers say inflation is bad and not getting any better
MarketWatch reports that American manufacturers say inflation remains a constraint, even as firms expand and report plenty of new orders; high energy prices and new Trump tariffs are framed as barriers to faster growth.
MarketWatch reports that US manufacturers describe inflation as “bad and not getting any better” even as they expand and say they have plenty of new orders. The piece attributes the slowdown in momentum to high energy prices and the impact of new Trump tariffs, which it presents as blocking faster growth.
For FX traders, this combination matters because it points to cost-push pressures (energy-related input costs) and policy-driven frictions (tariffs) hitting the production side. If manufacturers are struggling to translate order books into faster output because their cost base remains elevated, that can feed into broader inflation expectations even when demand looks intact.
At the same time, tariff effects and energy costs can be a headwind for growth, because higher operating costs can constrain hiring and investment, or shift demand in ways that are harder for manufacturers to respond to quickly. Taken together, the macro signal here is therefore not simply “inflation up” or “growth down”, but the risk of both staying resilient in the near term.
What to watch next is any more concrete evidence on how manufacturers’ pricing plans and cost conditions are evolving, and whether the reported energy-price drag and tariff effects begin to ease or intensify as further data and policy details emerge.
Why this matters for FX
If manufacturers’ pain is coming from higher energy costs and tariff-related frictions, that can keep pressure on input prices and inflation expectations, while also weighing on industrial demand through higher costs and reduced confidence. For FX, this matters most for the US dollar via rate-expectations: persistent “sticky” cost pressures can reduce the case for near-term easing, and tariff-related uncertainty can worsen growth expectations and financial conditions at the same time, leading to an ambiguous net effect on USD.