Quo vadis?

In an economic case of “both things can be true,” it appears the economy remains in good shape while many businesses are scratching and clawing to hold onto their margins in the face of cost pressures and so-so demand. AI ecosystem investments are clearly boosting growth—S&P Global analysts this week said they added half a point to GDP in Q2—but there are enough other indicators pointing to decent underlying momentum. Among them: Wednesday’s positive ADP jobs report, which also said annual pay is up 4.5% from a year ago. Where to from here?

— Geert De Lombaerde
 

• Manufacturing’s inflation issue will drag well into 2026

• Truckers talk of hiking prices, cutting capex and seeing hope for ’26

• Steel executives see ‘significant rebound’ in demand
 

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“Engage your people in improving the work
and trust their resiliency to problem-solve,
to use their intellect and experience
to make things better.”

That’s Eric Lussier of consulting firm Next Level Partners on
how leadership teams can make their companies better
during this period of higher uncertainty
 

Working on the workers

Even in tougher times, getting the most from your team members requires being disciplined about investing in them. As you set goals for another year, it’s worth being brutally honest and asking your top executives if they are identifying future leadership candidates and working to elevate them. A small cost now, in terms of money and time, can pay off big down the road—and save you far more money by keeping good people from walking.

 
• States seek to supplant the NLRB

• Leadership potential is shaped by who’s looking

• The right executive coach depends on the problem you’re trying to solve
 

438,000

The BLS' estimate of the number of
open manufacturing jobs in July

We’ve long hammered in this newsletter at the growing skills gap
in several key sectors. And we applaud the disparate efforts
of businesses, associations and government entities to fill
that gap. But it sure feels like we need an urgent,
everybody-in approach akin to the Space Race to ensure
those initiatives aren’t drops of water on a hot stove.

• How we can shape a resilient workforce for the future

What we’ll be watching

I’m going to keep a close eye on what happens to the economic/corporate vibes once the government reopens and again publishes key data series. The Q3 earnings season has been a bit of a grind for some sectors and not many executive teams have told investors they expect a sea change in early ’26. But what if official data for this month and December paints a rosier-than-expected picture and says we’re headed into next year on truly sound footing? Will sentiment and spending snap to it?