US manufacturing slips into contraction as costs surge, pressured by Trump tariffs [View all]

Source: Yahoo! Finance

Yahoo Finance
US manufacturing slips into contraction as costs surge, pressured by Trump tariffs

Alexandra Canal * Senior Reporter
Tue, April 1, 2025 at 12:50 PM EDT * 3 min read

Data out Tuesday showed activity in the manufacturing sector slipped into contraction for the first time this year and costs continued to surge as suppliers weigh the impact of President Trump's tariff policy.

The Institute for Supply Management's manufacturing PMI registered a reading of 49.0 in March, down from February's 50.3 reading and below the 49.5 economists polled by Bloomberg had expected. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate a contraction.

The prices paid index surged to 69.4, up from 62.4 the month prior and the highest reading since June 2022, reflecting companies' continued increase in costs. Economists had expected a reading of 64.6.

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Shortly following the data's release, the Federal Reserve Bank of Atlanta's GDPNow tracker, (1) which analyzes incoming data points, signaled negative growth of 3.7% in Q1, an escalation of the prior negative 2.8% reading.

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(1) https://www.atlantafed.org/cqer/research/gdpnow

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