THE KOBEISSI LETTER: Employee health insurance was the biggest driver, surging +14.2% for manufacturers and +12.9% for service firms, with some companies reporting increases of up to +50%.

Cost pressures across US businesses are accelerating:

US manufacturers reported total operating costs jumped +8.5% in 2025, nearly double the +5.0% rise in the prior year.

At the same time, service firms saw costs rise +7.0%, also accelerating from +5.0% in 2024.

Employee… pic.twitter.com/R3T6pEeWJs

— The Kobeissi Letter (@KobeissiLetter) March 10, 2026

Cost pressures across US businesses are accelerating: US manufacturers reported total operating costs jumped +8.5% in 2025, nearly double the +5.0% rise in the prior year. At the same time, service firms saw costs rise +7.0%, also accelerating from +5.0% in 2024. Employee health insurance was the biggest driver, surging +14.2% for manufacturers and +12.9% for service firms, with some companies reporting increases of up to +50%. Utilities costs rose +8.5% for both sectors, with ~20% of firms reporting increases of +20% or more. All while business insurance jumped +7.4% for manufacturers and +6.8% for service firms last year, with nearly 1 in 10 companies reporting spikes of at least +20%.

Inflationary pressures are building under the surface.