Editor's Letter

From MFGCalcs Magazine, Issue 1, November 2026, page 2.

The trillion was the headline. In the second quarter American manufacturers earned profits at an annual rate of $1.05 trillion, the Bureau of Economic Analysis reports, and no earlier quarter in the bureau’s industry figures, which begin in 2001, had reached a trillion. What surprised us was where the year’s gain went. Of every additional dollar manufacturers earned, about 73 cents landed in three industries: computers and electronics, chemicals, and petroleum and coal products (“The $1 Trillion Squeeze,” Page 12). Fabricated metal, the industry of machine shops and stamping plants, took less than 3 cents.

That is why this issue exists. A total that large reads like a verdict on all of American industry, yet by June, the quarter’s last month, producer prices for raw materials, from steel to paper, were rising faster than prices for machinery, foundry and forge products, and fasteners by the widest margin since February 2022. A record and a squeeze arrived together, and this issue is about who stood on each side.

The puzzle we worked hardest on is a bolt. In August imported steel fasteners carried the highest estimated duty of the 57 import families MFG Calcs tracks, the kind of protection that should let American bolt makers charge more. Their prices fell instead, from a January peak that was their highest since at least 1990, while the steel they are made from got dearer month after month and imports for the first eight months, in dollars before duty, were the lowest for that stretch since 2020. Our best answer, and the question it leaves open, is the bolt’s story (“The Fastener Paradox,” Page 39).

The last surprise was ours. Our forecast ranges are drawn to hold eight outcomes in 10. Of the 664 forecasts graded so far, about seven in 10 landed inside them, and two in three came in below what happened (“We Graded Our Own Forecasts,” Page 59). We print the misses because a forecast nobody grades is not worth reading. Each forecast in Next Quarter Watch will be graded the same way once its month is in.

Abe Lathrop

Read it in the magazine

• MFGCalcs Magazine, Issue 1, November 2026, page 2