The Conference Board said that consumer sentiment fell to its lowest level of the year in November. The Consumer Confidence Index declined from a revised 99.1 in October to 90.4 in November, the weakest reading since September 2014. As such, consumer attitudes have downshifted dramatically over the past two months, down from 102.6 in September, which had been the second-highest level of the year. Indeed, consumer confidence has been highly volatile in 2015, but with perceptions generally lower since reaching a pre-recessionary high in January (103.8). Much of that weakness has stemmed from worries about the economic outlook, but it is also possible that geopolitical events could be taking a toll on confidence, particularly in this latest survey. (continue reading…)
The Richmond Federal Reserve Bank said that manufacturing activity declined for the third straight month in November, highlighting recent challenges in the sector in the district. The composite index of general business activity declined from -1 in October to -3 in November. Manufacturers reported reduced growth in new orders (down from zero to -6), shipments (up from -4 to -2) and the average workweek (down from -5 to -3). Note that the pace of decline eased for both shipments and the workweek, and similarly, capacity utilization (up from -14 to zero) stabilized after falling sharply the month before. At the same time, employment continued to pull back from modest gains in prior months. Hiring (down from 3 to zero) stagnated in November, with wage growth (down from 17 to 6) slowing. (continue reading…)
Preliminary data from the Census Bureau suggest that the goods trade deficit should narrow somewhat, down from $66.25 billion in September to $59.15 billion in October. This was the result of an increase in goods exports (up from $123.79 billion to $126.55 billion) corresponding with a decline in goods imports (down from $190.04 billion to $185.70 billion). The largest gains in goods exports came from consumer goods (up $1.28 billion), capital goods (up $892 million), foods, feeds and beverages (up $388 million) and automotive vehicles (up $167 million). Conversely, industrial supplies (down $1.58 billion), capital goods (down $1.04 billion), automotive vehicles (down $831 million) and consumer goods (down $442 million) experienced significant declines in goods imports for the month. (continue reading…)
The Bureau of Economic Analysis said that real GDP expanded by 2.1 percent at the annual rate in the third quarter, improving from the earlier estimate of 1.5 percent. The higher figure largely stemmed from better inventory spending than originally thought, when slow growth in businesses replenishing their stockpiles reduced real GDP by 1.44 percentage points. Instead, the easing in inventory spending was less severe, only subtracting 0.59 percentage points from the headline figure. Even with this revision, however, the U.S. economy decelerated from 3.9 percent growth in the second quarter, and output is likely to grow by 2.4 percent for 2014 as a whole. This essentially maintains the more-sluggish pace of growth experienced since the Great Recession, with modest growth hovering between 2.0 and 2.5 percent. The current outlook is for 2.5 percent growth in 2016. (continue reading…)
After rebounding somewhat in October, activity pulled back again in November, according the most recent Markit Flash U.S. Manufacturing PMI data. The composite measure declined from 54.1 in October to 52.6 in November, its lowest level since October 2013. The headline index peaked for the year at 55.7 in March, with activity decelerating since then. Exports (down from 51.6 to 49.5) returned to negative territory in November, a sign of just how much the stronger dollar and weaknesses abroad have dampened international demand and overall sentiment. Other indices reflected slower growth for the month, even as there continued to modest expansions in activity. This included new orders (down from 55.5 to 53.1), output (down from 55.4 to 54.6) and employment (down from 52.9 to 51.9). (continue reading…)
The Federal Reserve Bank of Philadelphia said that manufacturing activity rebounded in November after contracting in the prior two months. The composite index of general business activity improved from -4.5 in October to 1.9 in November. With that said, manufacturers in the district were not fully out of the woods yet, with several key indicators continuing to decrease on net. This included new orders (up from -10.6 to -3.7), shipments (up from -6.1 to -2.5) and the average workweek (down from -7.3 to -16.2). The good news there was that the pace of decline for new orders and shipments eased for the month – a fact trumpeted by the Philly Fed in the press release noting “slight improvement” in November. Hiring (up from -1.7 to 2.6) also picked up a little, even as three-quarters of responses noted no change in employment. (continue reading…)
The index for manufacturing production increased .4% in October. The somewhat better production data in October was encouraging, particularly given the softness seen in the sector so far this year. Yet, manufacturers continue to grapple with challenges from the strong U.S. dollar and weak economic conditions to key export markets around the world – conditions that are not likely to improve much moving into the New Year.
With that in mind, policymakers should seek to enact measures that will increase manufacturing competitiveness including trade policies that help to open new markets for our products, as well as comprehensive tax reform and smarter regulatory policies.
The Empire State Manufacturing Survey reflected contracting levels of activity for the fourth straight month in November. The composite index of general business conditions improved slightly from -11.4 in October to -10.7 in November, even as this measure has been in solid negative territory since July. The underlying data were also negative across-the-board, even as there was some easing in the pace of decline for most of them. This included new orders (up from -18.9 to -11.8), with one-third of respondents saying that their sales had declined for the month, down from 37.2 percent who said the same thing in the prior report. At the same time, 21.4 percent of those completing the survey cited increased new orders in November, up from 18.3 percent in October. Data for shipments (up from -13.6 to -4.1) were similar. (continue reading…)
Retail sales rose 0.1 percent in October, improving ever-so-slightly from being unchanged in both August and September. As such, this report continues to reflect anxieties among consumers, with some hesitance for them to open their pocketbooks on recent economic weaknesses. Indeed, retail spending has grown just 1.7 percent over the past 12 months, a modest but less-than-ideal pace. (continue reading…)
The National Federation of Independent Business (NFIB) said that optimism was unchanged in October. The Small Business Optimism Index remained at 96.1 in October, representing some progress since the 94.1 reading observed in June. Coincidently, the index was 96.1 in October 2014, as well. Overall, it is also clear that small business owners remain anxious about the economy, with index values under 100 typically coinciding with softer economic growth. With that said, there were also positive developments for the month. For instance, the percentage of respondents saying that the next three months were a “good time to expand” increased from 12 percent to 13 percent, its highest level since February. This figure has trended higher over the past year, averaging 9.8 for all of 2014 and 11.6 year-to-date for 2015. Meanwhile, the percent planning capital expenditures over the next three to six months rose from 25 percent to 26 percent. (continue reading…)