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Manufacturing Continues to Be a Pathway to the Middle Class

A recent analysis by the National Employment Law Project asserts that manufacturing wages are declining, and employees in the sector are falling behind their peers in other industries. The reality is that manufacturing continues to be a pathway to the Middle Class for millions of Americans, with compensation that is rising, not falling, in recent years.

According to data from the BLS, average weekly earnings for manufacturing employees have increased from $847.60 in January 2007 to $1,018.37 in October 2014, a gain of 20.1 percent. Over the past two years, average weekly earnings have grown 5.1 percent, or roughly twice the rate of consumer prices (which were up 2.6 percent over that time frame). On an hourly basis, the average manufacturing worker earned just shy of $25 per hour in October, up from $21.19 in January 2007 or $23.92 two years ago.

Moreover, total compensation (which includes benefits, as well as wages and salaries) in manufacturing has risen from $32.20 per hour worked in the first quarter of 2010 to $35.74 in the second quarter of 2014. On a year-over-year basis, total compensation has grown 5.6 percent. In annual terms, the average manufacturing worker earned $77,506 in 2013, or almost $15,000 more than the overall average for all industries.

Overall, manufacturing workers continue to receive excellent compensation, which has risen steadily in recent years.

Chad Moutray is the Chief Economist for the National Association of Manufacturers.

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Dallas Fed: Manufacturing Activity Continued to Expand in November

The Dallas Federal Reserve Bank said that manufacturers continued to expand in November. The composite index of general business conditions was unchanged at 10.5 for the month. It has averaged 9.7 over the past nine months, which was progress from the 0.3 index reading in February. As such, we continue to see modest gains among manufacturers in the Kansas City Fed district, with mostly positive expectations about the future. (continue reading…)

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Monday Economic Report – November 24, 2014

Here is the summary for this week’s Monday Economic Report:

Central banks around the world have acted recently in an attempt to lift a sagging global economy. On Friday, for instance, the European Central Bank (ECB) announced that it has begun purchasing asset-backed securities, finally beginning a quantitative easing program that some have long sought. Earlier in the day, ECB President Mario Draghi said that “we will do what we must” to spur economic growth. In addition, the People’s Bank of China surprised markets by cutting interest rates on Friday. These actions followed the Bank of Japan’s announcement on October 31 that it would increase the amount of its monthly asset purchases. (continue reading…)

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Kansas City Fed Reported Increased Manufacturing Activity in November

The Federal Reserve Bank of Kansas City said that manufacturing activity picked up somewhat in its district in November. The composite index rose from 4 in October to 7 in November, its highest level in four months. Along those lines, the pace of production (up from 3 to 9), shipments (up from zero to 7) and employment (up from 6 to 9) improved for the month. In addition, export sales (up from -9 to 8) were positive for the first time since April. Yet, growth remains far from robust, with new orders (down from 2 to 1) decelerating for the fourth consecutive month and just barely above neutral. (continue reading…)

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Wisconsin Added the Most Manufacturing Jobs in October

The Bureau of Labor Statistics said that Wisconsin created the most net new manufacturing workers in October, hiring 5,400 additional employees for the month. Other states with significant increases in manufacturing employment in October included Pennsylvania (up 2,700), Indiana (up 2,500), Minnesota (up 2,300), Oregon (up 2,200) and South Carolina (up 2,100). Looking over the past 12 months, the five states with the greatest manufacturing employment gains were Indiana (up 24,100), Texas (up 14,900), Ohio (up 13,700), Wisconsin (up 12,100) and Minnesota (up 10,500). (continue reading…)

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Consumer Prices Were Unchanged in October

The Bureau of Labor Statistics said that consumer prices were unchanged in October. Over the past 12 months, consumer inflation has risen 1.7 percent. In addition, core prices, which exclude food and energy costs, were up 1.8 percent year-over-year. As such, core inflation continues to remain below the Federal Reserve’s stated goal of 2 percent at the annual rate, which it has now done for 20 consecutive months. Overall, these trends mirror the producer price index data released earlier in the week.

In particular, Americans continue to benefit from falling energy prices, which declined 1.9 percent in October and have dropped in each of the past four months. Since peaking in June, total consumer energy costs have decreased 5.4 percent. Indeed, we have seen the average price of regular gasoline decline from $3.64 a gallon during the week of June 23 to $2.86 a gallon this week, according to the Energy Information Administration. (continue reading…)

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Philly Fed Manufacturers Were Very Positive about Activity in November

The Federal Reserve Bank of Philadelphia said that manufacturing activity expanded very strongly in November, with its composite index measuring an off-the-chart 40.8 for the month. This was up from 20.7 in October, and you would have to go back two decades to find a higher figure (December 1993’s 41.2 reading). In fact, 49.2 percent of respondents to the Manufacturing Business Outlook Survey said that conditions had improved in November, up from 34.2 percent who said that same thing in October. Along those lines, the Philly Fed survey has registered above average index figures since the first quarter, averaging 23.0 from April to November. That suggests that manufacturers in the district are currently very positive about their businesses. (continue reading…)

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Markit: Chinese and European Economies Stalled in November

The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) fell to neutral (50) in November, down from 50.4 in October. This was the weakest reading since Chinese respondents noted contracting levels of activity from January through May. Indeed, output contracted once again (down from 50.7 to 49.5) for the first time since May, which was not a good sign. Hiring (down from 48.9 to 48.4) was also negative for the 13th straight month. On the positive side, new orders (up from 51.2 to 51.4) edged slightly higher, and exports (down from 51.7 to 50.5) continued to expand, albeit at a much slower pace. (continue reading…)

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Housing Trends Remain Positive in October Despite a Slight Drop in Starts

The Census Bureau and the U.S. Department of Housing and Urban Development said that housing data were mixed in October, but the overarching trend line remains positive. New housing starts eased somewhat, down from a revised 1,038,000 annualized units in September to 1,008,000 in October. Yet, housing permits – a proxy of future activity – rose from 1,031,000 to 1,080,000 units. That was the highest level of residential permitting since June 2008, suggesting movement in the right direction. In addition, new starts have also edged higher, up from an average of 955,167 in the first half of 2014 to 1,027,000 in the four months so far in the second half. (continue reading…)

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Producer Prices for Final Demand Goods Declined for the Fourth Straight Month

The Bureau of Labor Statistics (BLS) said that producer prices for final demand goods and services rose 0.2 percent in October. Yet, that gain stemmed mainly from increased costs for food (up 1.0 percent) and services (up 0.5 percent). Producer prices for final demand goods fell for the fourth straight month, down 0.4 percent. Falling energy costs (down 3.0 percent) continue to force the overall headline number lower. Indeed, prices for final demand energy goods have declined 5.9 percent since June, helping to decelerate overall inflationary pressures for producers.

At the same time, food prices rebounded from a softer September. Through the first 10 months of 2014, prices for final demand foods have risen 4.8 percent. In October, cooking oils, eggs, fruits, meats and vegetables accounted for the bulk of the monthly jump in food costs, with those same categories responsible for the year-to-date gains. (continue reading…)

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