All Posts By

Chad Moutray

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Manufacturing Job Openings Ticked Higher in December

By | Economy, Shopfloor Economics | No Comments

The Bureau of Labor Statistics said that manufacturing job openings ticked higher, up from 314,000 in November to 325,000 in December, a three-month high. Postings in the sector have trended lower since achieving an all-time high of 397,000 in April. On the positive side, this report will hopefully begin a movement in the right direction, and more importantly, job openings remain quite elevated overall, especially relative to net hiring. In 2016, job openings averaged 341,000 per month, up from 311,000 in 2015. In the December data, both durable (up from 181,000 to 183,000) and nondurable (up from 133,000 to 141,000) goods firms had more openings. Read More

U.S. Trade Deficit Edged Down Somewhat in December

By | Economy, Shopfloor Economics | No Comments

The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit edged down somewhat, down from $45.73 billion in November to $44.26 billion in December. For the year as a whole, the monthly data in 2016 were quite volatile, ranging from $36.52 billion in September to $45.73 billion in November. In 2016, the trade deficit averaged $41.85 billion, which was not far from the $41.70 billion average seen in 2015. The trade deficit was lower in December because the increase in goods exports (up from $122.14 billion to $126.93 billion) was enough to offset the gain in goods imports (up from $189.06 billion to $192.64 billion). The jump in both figures was important, suggesting that global trade is picking up; indeed, goods exports and imports were at their highest levels since July and March 2015, respectively. In addition, the service sector surplus inched up from $21.19 billion to $21.44 billion.. Read More

BLS Report: Another Touchdown for Manufacturers

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

The Bureau of Labor Statistics reported that manufacturing ran up the score for the second straight month in January began the new year on an encouraging note. The sector added 5,000 workers in January, building on a gain of 11,000 workers in December.

We hope this is a sign that manufacturers are starting to accelerate their hiring in light of a stronger demand and production outlook. Today’s report stands in contrast to the numbers throughout much of 2016. Last year, manufacturers were taking a more cautious approach, and as a result there are 46,000 fewer manufacturing workers today than one year ago, as global headwinds and economic uncertainties continued to take their toll on manufacturing activity. Read More

productivity

Manufacturing Productivity Rebounded Somewhat in the Fourth Quarter but Remained Soft in 2016

By | Economy, Shopfloor Economics | No Comments

The Bureau of Labor Statistics said that manufacturing labor productivity rebounded somewhat in the fourth quarter after being flat in the third quarter. Output per worker in the sector increased 0.7 percent in the fourth quarter, continuing a trend of soft productivity growth since the Great Recession. Indeed, manufacturing labor productivity averaged just 0.3 percent from 2013 to 2016. In comparison, output per worker in the sector averaged a more robust 5.2 percent annually from 2002 to 2008. Over a longer term, manufacturers have benefited from being leaner in recent years, but the recent sluggishness in productivity and output growth have meant that unit labor costs have risen 11.3 percent since the end of 2011. Read More

construction

Manufacturing Construction Fell to a Two-Year Low in December

By | Economy, Shopfloor Economics | No Comments

The Census Bureau said that private manufacturing construction spending remained weak in December, falling to a two-year low. The value of construction put in place in the sector declined from $70.54 billion in November to $68.10 billion in December, down 3.5 percent for the month. While manufacturing construction has largely trended higher over the past few years, activity has stalled more recently as the sector has grappled with sluggish growth and economic and political anxieties. Along those lines, construction activity in the manufacturing sector has pulled sharply lower since achieving the all-time high of $82.15 billion in September 2015. Over the past 12 months, manufacturing construction spending has fallen 5.9 percent. Read More

ism

ISM: Manufacturing Activity Continued to Grow Rather Strongly in January

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

The Institute for Supply Management’s (ISM) Manufacturing PMI continued to grow rather strongly, accelerating to its fastest pace since November 2014. The composite index rose from 54.5 in December to 56.0 in January, and it marked the fifth straight monthly expansion in the headline number. New orders (up from 60.3 to 60.4) and production (up from 59.4 to 61.4) expanded strongly in January. Along those lines, the sample comments all point to healthier conditions and stronger demand in the manufacturing sector, which is very encouraging. In addition, employment also picked up the pace (up from 52.8 to 56.1), suggesting that manufacturers have begun to move past the more cautious approach to hiring seen just a few months ago. Read More

ADP: Manufacturing Hiring Picked Up in January

By | Economy, Shopfloor Economics | No Comments

ADP said that manufacturing employment growth picked up in January, with the sector hiring 15,000 workers for the month on net. It marked the fourth time in the past five months that manufacturers added workers, but firms in the sector lost 39,000 workers in 2016, according to ADP. (The Bureau of Labor Statistics has said that manufacturing employment declined by 45,000 workers last year in official data.) Manufacturers had been wary about adding to their workforces over much of the past year due to global headwinds and economic uncertainties. Hopefully, this latest release is the start of things turning around as we begin 2017 with improved signs of activity and business confidence. Indeed, job openings have remained elevated in recent months, suggesting that manufacturers are prepared to accelerate hiring and be less cautious with better demand and production figures. Read More

Conference Board: Consumer Confidence Pulled Back a Little but Remained Elevated

By | Economy, Shopfloor Economics | No Comments

Consumer confidence pulled back a little in January after soaring to a 15-year high in December in the aftermath of the election, but it remained elevated. The Consumer Confidence Index declined from 113.3 in December, its highest level since August 2001, to 111.8 in January. This continued to represent a mostly positive assessment of the economy relative to perceptions just a few months ago. For instance, the index stood at 96.7 just six months ago. Americans’ view of current conditions (up from 123.5 to 129.7) improved in January. Whereas, the easing in the headline number mirrored somewhat reduced opinions about the future (down from 106.4 to 99.8). Note that the future expectations measure has also trended higher despite slipping in January, as it was 82.0 just six months ago. Read More

regional fed

Dallas Fed: Manufacturing Sentiment Expanded in January at Fastest Rate Since April 2010

By | Economy, Shopfloor Economics | No Comments

The Dallas Federal Reserve Bank reported that manufacturing activity expanded in January at its fastest rate since April 2010. The composite index of general business conditions increased from 17.7 in December to 22.1 in January, expanding for the fourth consecutive month after contracting for 21 straight months. The recent gains in business confidence can largely be attributed to better energy commodity prices and from a post-election boost in optimism, especially as it relates to expectations regarding pro-growth policies. Along those lines, key measures of activity were mostly higher in January, including new orders (up from 10.1 to 15.7), shipments (up from 5.8 to 15.8), employment (up from -3.4 to 6.1), hours worked (up from 3.1 to 9.1) and capital expenditures (up from 6.7 to 16.3). In addition, production (down from 14.8 to 11.9) and capacity utilization (down from 15.6 to 9.1) have also notched improvements in recent months despite some easing in the latest data.

Moving forward, manufacturing leaders were very positive about the next six months. The forward-looking measure jumped from 42.5 to 43.7, a level not seen in just over 12 years (December 2004). Indeed, nearly 62 percent of respondents expect increased levels of production and new orders in the months ahead, with 46.4 percent and 35.2 percent predicting higher employment and capital spending, respectively.

personal income

Americans Accelerated Their Spending at Year’s End

By | General | No Comments

The Bureau of Economic Analysis said that personal spending accelerated at year’s end, rising 0.5 percent in December. This was its fastest monthly pace since September, boosted by strong growth in durable goods purchasing, which were up 1.4 percent in December. In contrast, nondurable goods spending was slightly higher but essentially flat. In general, Americans have been more willing to open their pocketbooks in recent months relative to a more-cautious approach seen earlier last year. Along those lines, personal consumption expenditures grew 4.5 percent year-over-year in December, up from 2.9 percent in March and its highest level in two years.

With the pickup in spending, the savings rate edged lower, down from 5.6 percent in November to 5.4 percent in December. This was the lowest rate since March 2014, and it was down from 6.1 percent one year ago. Therefore, the savings rate remained consistent with the narrative of better spending data as the year progressed. Read More