While the overall economy (1.6% growth in the 3rd quarter) is decelerating, manufacturing output continues to be robust.
Last week’s Labor Department report on productivity showed that output of the manufacturing sector rose at a seasonally adjusted annual rate (SAAR) of 4.2 percent in the 3rd quarter. This marks the 4th consecutive quarter with manufacturing outpacing the overall economy. The last time this happened was 1997!
Over the past 4 quarters, manufacturing output is up 6.1 percent, the best performance since the 4 quarters ending in the first quarter of 1998!
And while overall non-farm business productivity growth slowed to an anemic 1.3 percent in the 3rd quarter, manufacturing efficiency gains continued to remain strong, with manufacturing productivity increasing by 5.9 percent in the 3rd quarter — the best quarterly performance in 3 years!
So while the on-going housing market correction has taken some steam out of the recovery, the manufacturing sector has performed solidly over the past year. And, with output outpacing productivity growth, manufacturers have expanded production employment by 143,000 over the past 4 quarters.
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