All Posts By

Chad Moutray

NY Fed: Manufacturing Activity Contracted for the Third Consecutive Month in October

By | Economy, Shopfloor Economics | No Comments

The Empire State Manufacturing Survey reported that manufacturing activity contracted for the third consecutive month in October. The composite index of general business conditions declined from -2.0 in September to -6.8 in October. Many of the underlying data points continued to reflect softness in the New York Federal Reserve Bank’s district, with negative readings once again despite some easing in the rate of decline, including new orders (up from -7.5 to -5.6), shipments (up from -9.4 to -0.6), employment (up from -14.3 to -4.7) and the average workweek (up from -11.6 to -10.4). Indeed, 32.3 percent of respondents said orders fell in October, compared to 26.7 percent noting increases. On the employment front, 65.1 percent of manufacturers were holding firm with hiring in October, with 15.1 percent adding more workers and 19.8 percent reducing the size of their workforce. Read More


Manufacturing Production Rebounded Slightly in September, but Flat Year-Over-Year

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

The Federal Reserve said that manufacturing production rebounded slightly in September, up 0.2 percent, after declining by 0.5 percent in August. The pickup in activity was expected, but even with a gain for the month, it should be noted that activity in the sector continues to be weaker than desired. Along those lines, manufacturing production was flat on a year-over-year basis, with essentially stagnant growth over the course of the past seven months. Manufacturers have struggled in their ability to increase demand, including exports, with ongoing economic and political uncertainties also dampening growth. Moreover, manufacturing capacity utilization inched up from 74.8 percent to 74.9 percent, but that remained well below the 75.5 percent utilization rate seen one year ago. Read More


University of Michigan: Political Uncertainty Pushed Confidence Lower in October

By | Economy, Shopfloor Economics | No Comments

The two measures of consumer confidence have diverged recently. The Conference Board’s survey jumped strongly in September, rising to its highest level in nearly eight years. Meanwhile, the competing survey from the University of Michigan and Thomson Reuters, out today, fell from 91.2 in September to 87.9 in October, its lowest level in 12 months. As noted by Richard Curtin, the survey’s Chief Economist, “The early October loss was concentrated among households with incomes below $75,000, whose Index fell to its lowest level since August of 2014. In contrast, confidence among upper income households remained unchanged in early October from last month….” He submits that political uncertainties surrounding the upcoming election have diminished sentiment in October. Read More


Producer Prices Ticked Higher in September, but with Inflation Largely Still in Check for Now

By | Economy, Shopfloor Economics | No Comments

Producer prices ticked higher in September, bouncing back from softness in the prior two months. The Bureau of Labor Statistics said that producer prices for final demand goods and services rose 0.3 percent in September, the first increase reading in three months. For final demand goods, food and energy prices were both higher, up 0.5 percent and 2.5 percent, respectively, but each were coming back from notable declines in both July and August. The longer-term trend has been negative for both. Food costs have decreased 3.4 percent over the past 12 months, with energy prices off by 2.4 percent year-over-year. Read More


Retail Spending Rebounded in September after Pulling Back in August

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The Census Bureau said that retail sales rebounded in September, up 0.6 percent, after declining by 0.2 percent in August. This suggests that the public has begun opening their pocketbook after pulling back somewhat in the prior two months. In addition, Americans seem to be less cautious in their purchases than they were earlier in the year. Retail spending has risen 2.7 percent over the past 12 months, a nice improvement from the 1.7 percent pace observed in March. This data includes gasoline station sales, which have fallen 3.4 percent since September 2015. Excluding gasoline, retail sales were up 3.2 percent year-over-year. Read More


Manufacturing Job Openings Pulled Back in August but Remained Elevated

By | Economy, Shopfloor Economics | No Comments

The Bureau of Labor Statistics said that manufacturing job openings pulled back in August but remained elevated relative to net hiring. Postings in the sector fell from 379,000 in July to 337,000 in August. Openings have drifted lower since achieving an all-time high of 397,000 observed in April. Through the first eight months of 2016, job openings have averaged 352,000 per month, up from 311,000 for 2015 as a whole. As such, we have continued to see relatively healthy gains in manufacturing job openings, despite some easing in this report, which gives us optimism for faster hiring growth moving forward. In the August data, both durable (down from 223,000 to 194,000) and nondurable (down from 156,000 to 143,000) goods firms had slower job opening rates, but the July numbers also appear to be a bit of an outlier based on recent trends. Read More


September Manufacturing Job Market Numbers Disappointed Again

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

For the second straight month, manufacturing employment fell, which was disappointing. Given the rebound in sentiment and activity seen in other measures, there was some hope that job growth might stabilize in this report. Instead, manufacturers lost 13,000 workers on net in September, extending the loss of 16,000 employees in August. More importantly, manufacturing employment has decreased by 58,000 year-to-date, suggesting continuing cautiousness among manufacturing business leaders to add workers in light of lingering weaknesses in the global economy.

On this Manufacturing Day, that message is a bittersweet one. We were encouraged by the rebound in demand and production seen in Monday’s ISM figures, and there is some expectation that activity will pick up in the coming months. Yet, these figures suggest a degree of nervousness in the economic outlook, with job growth in manufacturing continuing to lag behind.

With that in mind – and especially with the election just weeks away – manufacturers will continue to stress pro-growth policies that will enable faster economic growth and enhance the sector’s overall global competitiveness. Read More

U.S. Trade Deficit Edged Up in August; Manufactured Goods Export Growth Remains Challenged

By | Economy, Shopfloor Economics | No Comments

The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit edged up from $39.55 billion in July to $40.73 billion in August. The data have been quite volatile through the first eight months of 2016, averaging $41.34 billion but ranging from $36.93 (March) to $45.26 (February). The year-to-date average so far this year was marginally lower than the $41.70 billion average for 2015 as a whole. The higher figure in August’s report stemmed from an increase in goods imports (up from $$184.45 billion to $185.59 billion) which was enough to offset a slight increase in goods exports (up from $124.12 billion to $125.31 billion). On the positive side, goods exports grew to their fastest pace since July 2015. Read More

ADP: Manufacturing Employment Declined Again in September

By | Economy, Shopfloor Economics | No Comments

ADP said that manufacturing employment declined again in September, with hiring in the sector down in seven of the past eight months. In September, there were 6,000 fewer workers on net for manufacturers, which continue to be challenged by global headwinds and economic anxieties. Overall, employment in the sector is down by 42,000 through the first nine months of 2016. This suggests that manufacturers remain wary about adding to their workforce, particularly with sluggish growth in demand and production. Yet, job openings have been more favorable of late, which could indicate better hiring growth moving forward when manufacturers become less cautious. Read More


Manufacturing Construction Declined by 1.4 Percent in August

By | Economy, Shopfloor Economics | No Comments

The Census Bureau said that private manufacturing construction spending declined by 1.4 percent in August, pulling a little after rebounding in July. The value of construction put in place in the sector fell from $75.57 billion in July to $74.49 billion in August. Activity in August, however, remained an improvement from June’s $72.81 billion pace, which was the slowest since January 2015. The bottom line of this data has been a mixed one, with strong gains over the long-term but with recent softness due to sluggish economic growth and a more-cautious outlook. For instance, construction activity in the manufacturing sector has pulled sharply lower since achieving the all-time high of $82.15 billion in September 2015. Yet, manufacturing construction spending has risen 28.2 percent over the past 24 months, boosted in particularly by increased investment in the chemical sector, which continues to benefit from cost advantages in the energy sector. Read More