American factories kept the lights on for a ninth consecutive month in September — but the bill for doing business just rocketed higher. The Institute for Supply Management's Manufacturing PMI report, released Thursday morning, put the headline index at 54.5% for September, a hair below August's 54.6% and just under Wall Street's roughly 55% forecast. Any reading above 50 signals growth, and this marks the sector's ninth straight expansionary month and the broader U.S. economy's 23rd.

Under the hood, the numbers are a mixed bag. New Orders jumped to 55.3% from 53.7%, and Employment climbed to 52.7% — its third straight month of growth after a brutal 33-month losing streak. Production cooled to 56.7% from 58.3%, its slowest pace since June, while Supplier Deliveries held at an elevated 59.0%, signaling supply-chain strain for a 10th straight month.

The price of growth

The number that jumped off the page was the Prices Index, which rocketed 6.8 points to 77.9% — its sharpest monthly leap in the report. Raw-material costs have now risen for 24 consecutive months. Susan Spence, who chairs ISM's Manufacturing Business Survey Committee, didn't mince words about where the pain is coming from.

"The Prices Index increased 6.8 percentage points, returning to its level at the beginning of the Iran War," Spence said, noting respondents' comments ran 60% negative to 40% positive this month.

Factory purchasing managers pointed to tariffs in 34% of negative comments — citing disrupted supply chains and steel and component shortages — while pricing volatility on steel and aluminum showed up in 46% of gripes, and the lingering Iran conflict drove up energy and shipping costs in another 30%, according to FreightWaves' breakdown of the report. Not every gauge agreed on the scale of the strength: a competing S&P Global survey, released the same day, put its final September reading at 55.9% — well short of the 57.0% economists had penciled in. Analysts cited by that report credited whatever strength does exist to a boom in AI-infrastructure buildout and defense spending.

The split verdicts leave the Federal Reserve working with a blurrier picture than usual, and that picture isn't getting any clearer soon: a federal government shutdown that began at midnight Wednesday has thrown the release schedule for official data like the jobs report and consumer price index into doubt, leaving privately compiled surveys such as ISM's as some of the only fresh economic signals investors will get in the weeks ahead. ISM is scheduled to publish its October reading on the first business day of next month, government funding fight permitting.