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Business activity picked up in April, but Americans are paying more for almost everything, and most say things are only getting worse. The U.S. composite PMI is at 52.0 this month, a three-month high that suggests a slight recovery following a sluggish March, according to new data from S&P Global. However, the average price of goods and services increased at its quickest rate since July 2022, a signal that should concern both consumers and legislators. On paper, the report’s manufacturing section appeared solid. The manufacturing PMI reached its highest level in 47 months at 54.0. However, economists advise being cautious. Much of that growth came not from people actually buying more, but from companies rushing to stock up before prices climb further or supply chains buckle. Surveys were filled with phrases like “panic buying” and “emergency buying,” language that points to fear, not confidence. Services told a quieter story. The services PMI edged up to 51.3, but that is still the second-lowest reading of the past year. New orders barely grew. Businesses and households across tourism, financial services, and other sectors are holding back spending. People are waiting to see what happens next, weighed down by geopolitical tensions and stretched budgets. Supply chains under pressure Supply chains are showing real strain. Delays from factory suppliers in April were the worst since August 2022. Shipping difficulties related to continuing hostilities overseas account for a portion of that. A portion of it stems from businesses purchasing excess inventory just to be safe, which further restricts supply and drives up costs. The report’s pricing information is uncomfortable to read. Inflation in manufacturing products reached a ten-month high. The service sector’s price rises hit a 45-month high. Input costs rose at their fastest rate in 11 months. Taken together, the inflation picture is getting harder to dismiss. Regular Americans are feeling it. A new Fox poll found that 70% of respondents believe the economy is getting worse, up sharply from 55% a year ago. Only 26% said conditions have improved. The pessimism cuts across party lines. Even among Republicans, 56% described the state of the economy as bad. Approval ratings fall as energy costs rise President Trump’s economic approval rating has taken a hit. It dropped to 30% in April, down from 38% in March. The consumer price index rose 3.3% in March, slightly above the level when he took office. Roughly one in four Americans approves of how he is handling the cost of living. One major driver of that frustration is energy costs, pushed higher by the ongoing conflict with Iran. That conflict is also shaping what comes next for the broader economy. The U.S. has imposed a naval blockade on Iran, while Iran’s closure of the Strait of Hormuz has pushed oil prices toward $90 a barrel. The prospect of gasoline hitting $5 a gallon is now a real concern for both the White House and the Federal Reserve. For the Fed, the situation is getting harder to navigate. Chris Williamson, chief business economist at S&P Global, said that if inflation keeps moving in the direction the PMI data suggests, it becomes much harder for the central bank to make a case for cutting interest rates. The gap between what the numbers show and what people feel is hard to ignore. A manufacturing PMI of 54.0 normally signals solid growth. However, rather than being motivated by actual customer demand, this reading is being driven by defensive actions taken by businesses to create buffers against uncertainty. There might not be enough actual demand to sustain the trend when stockpiling eventually decreases. For the time being, the Fed is torn between an economy that appears to be doing well and inflation that is being driven up more by fear than by growth. Any discussion of rate cuts will remain firmly on hold until that changes. If you want a calmer entry point into DeFi crypto without the usual hype, start with this free video.