Michigan created the most net new manufacturing jobs in January, according to the latest state figures from the Bureau of Labor of Statistics. There were 4,900 additional manufacturing workers in Michigan in January, which continues to benefit from strong demand in motor vehicles and parts. Other states with significant employment gains in the sector in January included Georgia (up 3,900), Ohio (up 3,600), North Carolina (up 3,400), Wisconsin (up 2,900) and Kentucky (up 2,800). (continue reading…)
The Census Bureau and the U.S. Department of Housing and Urban Development said that residential construction activity plummeted in February, falling 17.0 percent. New housing starts declined from an annualized 1,081,000 in January to 897,000 in February. This was the slowest pace of housing starts since January 2014. Perhaps coincidently, that month was marred by a number of winter storms which were significant enough to lessen GDP and overall economic activity. This most recent report likely suffered from the same thing, particularly with major snowstorms in the Northeast and the Midwest, with starts in those two regions down 56.5 percent and 37.0 percent in February, respectively. Starts in the West were also weak, down 18.2 percent for the month. (continue reading…)
The Empire State Manufacturing Survey reported expansion in the sector for the third straight month in the district, but at a slower pace. The composite index of general business conditions from the New York Federal Reserve Bank has declined from 10.0 in January to 7.8 in February to 6.9 in March. The underlying data suggest a mixed picture for the sector. The pace of shipments (down from 14.1 to 7.9) eased for the month, but continued to grow at a decent rate. In contrast, growth in new orders (down from 1.2 to -2.4) slipped into negative territory. Roughly one-quarter of survey respondents said that their orders had increased for the month, with 27.5 percent noting declines. As such, these data mirror other indicators which reflect current headwinds in the economy. (continue reading…)
Manufacturing production decreased by 0.2 percent in February, according to the Federal Reserve Board. This followed declines in both December and January, down 0.1 percent and 0.3 percent, respectively. Each of the prior two month’s data points were revised lower, with January’s manufacturing production figure originally estimated as an increase of 0.2 percent. A number of headwinds have combined to bring about this softness in the manufacturing sector, including global economic weakness, a strong U.S. dollar, the West Coast ports slowdown, a cautious consumer and the weather in some parts of the country.
As a result, capacity utilization in the manufacturing sector fell for the third straight month, down from 78.1 percent in November to 77.3 percent in February. (continue reading…)
Here is the summary for this week’s Monday Economic Report:
Global news dominated the headlines once again last week. The euro sank lower as the European Central Bank began its quantitative easing program, where it plans to purchase 1 trillion euros in government bonds over the next 18 months in an effort to stimulate faster economic growth. As a result, the euro has depreciated by nearly 25 percent over the past 10 months, down from $1.3924 per one euro on May 6 to a close of $1.0483 on Friday. There is also some expectation that it will move to parity soon, a level last seen in November 2002. (For more information on international developments, see the latest Global Manufacturing Economic Update.) (continue reading…)
Here is the summary for this month’s Global Manufacturing Economic Update:
Manufacturers are facing some significant headwinds from sluggish growth abroad and from a U.S. dollar that has strengthened sharply over the past few months. According to the Federal Reserve Board, the trade-weighted U.S. dollar index against major currencies has risen from 75.6968 on July 1 to 91.5660 on March 6, a 21.0 percent increase. Along those lines, the euro has fallen to its lowest levels since January 2003. It peaked in 2014 on May 6 at $1.3924 for each euro. On March 12, it closed at $1.0640 to the euro, with some expectations that it will move to parity soon. It last reached parity in November 2002. Overall, these developments could hurt the ability of manufacturers in the United States to grow exports. (Some recent comments from me in the media on this topic can be found in the Financial Times, The New York Times and The Washington Post.) (continue reading…)
The University of Michigan and Thomson Reuters said that consumer confidence unexpectedly slipped for the second straight month. The Consumer Sentiment Index has dropped from 98.1 in January to a revised 95.4 in February to 91.2 in March, according to preliminary data. The January figure had been the highest level in 11 years. Americans continue to be more positive today than one year ago, with the index measuring 80.0 in March 2014, and as such, the longer-term trend remains positive.
However, these data also suggest that the public remains anxious, mirroring the caution seen in recent retail sales data. The University of Michigan survey indicates some easing in both current and expected measures over the past two months. Final data will be released on March 27.
Chad Moutray is the chief economist, National Association of Manufacturers.
The Bureau of Labor Statistics said that producer prices for final demand goods and services surprisingly fell 0.5 percent in February. The consensus expectation had been for an increase of 0.3 percent, particularly as petroleum prices have stopped falling. Indeed, final demand energy goods prices were unchanged as a whole in February, the first non-negative number since June. Yet, lower food prices helped to reduce producer prices for final demand goods for the eighth straight month, down 0.4 percent. In particular, there were lower prices reported for dairy products, fruits and vegetables, grains, meats and shellfish – precisely the areas that have seen significant increases over much of the past year. Food prices rose 4.3 percent in 2014, but declines in the first two months of 2015 have reduced these costs by 2.6 percent. (continue reading…)
The Census Bureau said that retail sales slipped for the third straight month in February. Retail spending fell 0.6 percent in February, building on the 0.9 percent and 0.8 percent declines observed in December and January, respectively. Much of the recent decline has stemmed from lower gasoline prices, with gasoline station sales reflecting reduced receipt levels. To illustrate this point, Americans spent $46.3 billion at gasoline stations in February 2014, but that figure has dropped 23.0 percent since then to $35.6 billion in this report. Indeed, retail sales grew 1.7 percent year-over-year, but if you were to exclude gasoline station spending, the year-over-year rate would have been 4.7 percent. This suggests that consumer spending is better than the headline numbers might indicate. (continue reading…)
The Bureau of Labor Statistics said that manufacturing job openings rebounded in January after easing slightly in December. The number of job postings in the sector rose from 310,000 in December to 330,000 in January, which was just barely lower than the 332,000 seen in November. November’s pace had been the fastest since August 2007, and the number of openings have risen steadily on a year-over-year pace, up from 263,000 in January 2014. In this latest report, both durable (up from 195,000 to 202,000) and nondurable (up from 115,000 to 127,000) goods industries reported more openings for the month. (continue reading…)