All Posts By

Chad Moutray

Manufacturing Production Rose for the Fourth Straight Month in December, up 2.4% Year-over-Year

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

The Federal Reserve said that manufacturing production rose for the fourth straight month in December, edging up by 0.1 percent. While this was slower than the 0.3 percent gain seen in November and while we might prefer increases that were more broad-based for the month, the data remain encouraging overall. Indeed, manufacturing production has risen by 2.4 percent over the past 12 months, down from 2.5 percent in November, which was the best year-over-year rate since July 2014. In a similar manner, manufacturing capacity utilization matched November’s rate of 76.4 percent, a reading not seen since May 2008. Read More

New York Fed: Manufacturing Activity Eased Somewhat in January but Remained Strong Overall

By | Economy, Shopfloor Economics | No Comments

Manufacturing activity in the New York Federal Reserve Bank’s district eased somewhat in January but remained strong overall. In the latest Empire State Manufacturing Survey, the composite index of general business conditions declined from 19.6 in December to 17.7 in January. (Note that these figures reflect a new seasonal adjustment update for all past data points.) While this was the third straight deceleration in the headline index, off from the three-year high of 28.1 in October, the pace of expansion has remained robust, averaging 20.6 over the past eight months.

The underlying indicators reflected slower, but still encouraging, growth. This included continuing solid growth for new orders (down from 19.0 to 11.9) and shipments (down from 23.5 to 14.4), but much softer expansions in the labor market variables of employment (down from 22.9 to 3.8) and the average workweek (down from 9.3 to 0.8). On the downside, prices for raw materials (up from 29.7 to 36.2) accelerated once again to an 11-month high, with nearly 40 percent of respondents saying that input costs were higher in January. Read More

Reduced Energy Costs Keep Consumer Price Inflation in December in Check

By | Economy, Shopfloor Economics | No Comments

The Bureau of Labor Statistics reported that consumer prices edged up 0.1 percent in December, slowing from the 0.4 percent gain in November. Reduced energy costs, which declined 1.2 percent for the month, helped to keep consumer inflation in check in December, with gasoline prices off 2.7 percent. This is largely consistent with data from the Energy Information Administration, which pegged the average price for regular conventional gasoline at $2.47 per gallon on November 6, falling to $2.36 a gallon on December 25. (Note that costs have risen since then, averaging $2.43 per gallon on January 8.) In contrast, food prices rose 0.2 percent in December. Since December 2016, food and energy costs have increased 1.6 percent and 6.9 percent, respectively. Read More

Producer Prices Inched Down 0.1 Percent in December, with Modest 2.2 Percent Year-Over-Year Core Inflation

By | Economy, Shopfloor Economics | No Comments

The Bureau of Labor Statistics said that producer prices for final demand goods and services inched down 0.1 percent in December, declining for the first time since August 2016. For manufacturers, producer prices for final demand goods were unchanged in December, pausing after jumping 1.0 percent in November. More than anything, this reflected flatness in energy prices, which had increased by 4.6 percent in the prior report. This was largely consistent with recent observations in the spot price for West Texas intermediate (WTI) crude oil, which increased from an average of $51.58 in October to $56.64 in November to $57.88 in December. (Note that WTI prices have increased significantly since then, with a spot price of $64.45 this morning.)

Meanwhile, food prices were off by 0.7 percent in December. On a year-over-year basis, final demand food and energy costs have risen 1.9 percent and 10.3 percent, respectively. Excluding food and energy, producer prices for final demand goods were up by 0.2 percent in December, increasing for the fifth consecutive month.   Read More

NFIB: Small Business Optimism Eased in December but Remained Highly Elevated in 2017

By | Economy, Shopfloor Economics | No Comments

The National Federation of Independent Business reported that the Small Business Optimism Index declined from 107.5 in November to 104.9 in December. November’s reading was not far from the record high in July 1983 (108.0). Note that readings above 100 are consistent with strong growth among small business owners, and the robust data seen for much of the past year would suggest a healthy economic outlook overall. Indeed, the headline index, which averaged 95.3 in 2016, jumped to an average of 104.9 in 2017, consistent with the December figure.   Read More

Total Consumer Credit Rose in November at Fastest Pace in 16 Years

By | Economy, Shopfloor Economics | No Comments

The Federal Reserve Board reported that U.S. consumer credit outstanding rose 8.8 percent at the annual rate in November, up from a 6.5 percent gain in October. Total consumer credit was $3.827 trillion in November, with $1.023 trillion in revolving credit and $2.805 trillion in nonrevolving credit. The monthly increase in November was the largest in 16 years, which no-doubt helped to boost consumer spending for the month. Across the past 12 months, consumer credit has increased 5.3 percent. Read More