US Economic Outlook: July 2026

U.S. manufacturing has outperformed expectations during the first half of 2026, but the recovery is not happening evenly across the industry. 

In the July Manufacturing Outlook, Board Senior Economist Matt Hillman examines the growing divide between core manufacturing and consumer-linked manufacturing, explaining why stronger headline performance masks two very different demand environments. The outlook explores the economic forces shaping each segment and what they mean for manufacturers. 

It also highlights three planning priorities manufacturers should consider as they navigate changing demand signals, supply chain uncertainty, and evolving market conditions. 

What’s covered: 

• Why manufacturing has outperformed expectations during the first half of 2026. 
• What’s driving the divergence between core manufacturing and consumer-linked manufacturing. 
• How energy costs, labor market trends, and moderating wage growth are influencing manufacturers. 
• Three planning priorities manufacturers should consider for the months ahead. 

Understanding the forces driving today’s manufacturing environment can help business leaders make more informed planning decisions and prepare for a wider range of outcomes in the second half of the year.