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Monday Economic Report – June 29, 2015

Here is the summary for this week’s Monday Economic Report:

Last week, there were several reminders that the manufacturing sector has not recovered fully from economic weaknesses earlier in the year, even as business leaders remain cautiously optimistic about activity in the coming months. Durable goods orders declined 1.8 percent in May, extending April’s 1.5 percent decrease. Much of this softness stemmed from reduced aircraft sales, with orders excluding transportation modestly higher. Nonetheless, durable goods demand has been quite weak for much of the past year. On the positive side, we would expect stronger durable goods orders in the June data, with the recent Paris Air Show lifting aircraft sales, and the broader measure, which excludes transportation, has edged marginally higher over the past three months. We hope that this is the start of a rebound. (continue reading…)

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Monday Economic Report – June 22, 2015

Here is the summary for this week’s Monday Economic Report: 

Last week, one media outlet reported that manufacturing has been in a “technical recession” for the past six months. I am more hesitant to use the R-word to describe the sector’s performance year-to-date, and in my view, this description somewhat overstates the significance of broader market trends, particularly for expectations moving forward. At the same time, manufacturing production has declined since late last year, as illustrated in the graphic below. A number of significant economic headwinds have reduced output in four of the past six months, reducing the year-over-year pace of growth in the sector from 4.5 percent in November to 1.8 percent in May. Capacity utilization has also declined for five consecutive months, down from 78.1 percent in December to 77.0 percent in May. (continue reading…)

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IPAB Needs to Go

Today the House Ways and Means Committee will be considering legislation to eliminate the Independent Payment Advisory Board (IPAB) created as part of the Affordable Care Act. The intention behind IPAB was to form an independent body appointed by the Administration to recommend spending reductions in the Medicare program if expenditures reach a level determined to be too high as defined by the ACA. If for some reason the IPAB has not been convened or its members not appointed, the Secretary of Health and Human Services steps in to serve the role of making recommendations to Congress for an up or down vote – without amendment. (continue reading…)

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Monday Economic Report – June 1, 2015

Here is the summary for this week’s Monday Economic Report: 

The U.S. economy shrank in the first quarter for the second year in a row, with revised data showing that real GDP declined by 0.7 percent. This was down from an earlier estimate of 0.2 percent growth. Overall, this was a disappointing start to 2015. That is particularly true when you look at the optimism that many businesses had at the start of the year. Yet, manufacturers faced a number of significant headwinds in recent months, including weaknesses abroad, a strong U.S. dollar, lower crude oil prices, the residual effects of the West Coast ports slowdown, bad weather in some regions of the country and a still-cautious consumer. (continue reading…)

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Still Searching for the Contracting Problem

In a statement released by the NAM in response to the recent announcement of proposed regulations and guidance to implement the so-called Fair Pay and Safe Workplaces Executive Order, I said they were a solution in search of a problem. There has been scant justification for the recent efforts of the administration and their allies to inject political subjectivity into what should be a clinical judgment about the ability of a contractor to fill an order on-time and on-budget. In what appears to be the best argument for creating an entirely new process and giving authority to political appointees to exclude businesses from federal contracting for political reasons, a blog post was put out Wednesday by the White House. (continue reading…)

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Monday Economic Report – May 18, 2015

Here is the summary for this week’s Monday Economic Report:

One of the larger headlines of the past week was the renewed strength of the euro, which closed at $1.1449 on Friday. To put that exchange rate in perspective, the euro traded for $1.0582 on April 13, and Friday’s close was the highest level for the euro since February 2. To be fair, the U.S. dollar remains strong against the euro, up 17.8 percent since May 6, 2014. Yet, the recent weakness in the dollar (and strength in the euro) has been the result of weaker-than-expected economic data in the United States and better-than-anticipated numbers coming out of Europe. Many of the underlying long-term fundamentals in these two regions remain the same, but those manufacturers worried about the negative impact of a soaring dollar got some welcome relief last week in the recent easing of the greenback. (continue reading…)

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Reduced Energy Costs Continue to Push Producer Prices Lower in April

The Bureau of Labor Statistics said that producer prices for final demand goods and services fell 0.4 percent in April, with prices for goods down 0.7 percent. Final demand goods prices have declined in nine of the past ten months, driven lower largely on reduced energy costs. Final demand energy goods were off 2.9 percent in April, or 24.3 percent since peaking 10 months ago in June. Producer prices for final demand food goods also declined in April, down 0.9 percent. Sharply lower egg prices helped push overall food costs down, along with chicken, cooking oils, oilseeds, pork, processed fruits and vegetables and roasted coffee. Through the first four months of 2015, food costs have declined 4.2 percent. (continue reading…)

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Consumers Remained Cautious in their Spending in April

Consumers remained cautious in their spending in April, according to the Census Bureau. Retail sales were unchanged for the month, softening from the rebound seen in March. Overall, spending has decelerated significantly over the past few months, down from a year-over-year rate of 4.7 percent in November to just 0.9 percent in April.

With that said, the longer-term view is perhaps more encouraging than the headline number might suggest. Total retail spending includes gasoline station sales, which have fallen 22.0 percent since April 2014 on lower prices. Excluding gasoline stations, retail sales grew 3.6 percent year-over-year. This suggests modest growth in the broader retail market over the past 12 months. Still, this figure has also eased recently, down from 5.8 percent year-over-year in November. (continue reading…)

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BLS: Manufacturers Added 1,000 Workers in April

Manufacturers added 1,000 net new workers in April, according to the Bureau of Labor Statistics. This was an ever-so-slight improvement after being unchanged in March. Overall, though, it was the third consecutive month of hiring weakness in the manufacturing sector. There have been a number of significant headwinds buffeting the U.S. economy in the early months of 2015, including a strong dollar, slowing growth abroad, lower crude oil prices, residual effects from the West Coast ports slowdown, a cautious consumer and weather. Each of these challenges has dampened overall activity in the sector, including employment growth. (continue reading…)

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Manufacturers Are Ready for TSCA Reform

Today’s announcement that 36 bipartisan U.S. Senators have now joined the Frank R. Lautenberg Chemical Safety for the 21st Century Act is proof that compromise is still possible in the halls of the United States Congress and that Washington can still work for manufacturers and citizens across the country.

It’s past time for TSCA Reform, and this year—likely this summer—presents a far too infrequent opportunity to pass bipartisan legislation to vastly improve an outdated environmental statute. Manufacturers are ready for TSCA Reform.

We need a modern federal chemical regulatory system that fosters manufacturing innovation and future technological breakthroughs in areas like energy, sustainability, healthcare and countless others while ensuring the public and environment are protected. The bipartisan legislative proposals before both the Senate (the Frank R. Lautenberg Chemical Safety for the 21st Century Act) and the House (the TSCA Modernization Act of 2015) would strengthen our federal chemical regulations while increasing regulatory certainty and removing barriers to economic growth. They would further protect the public while promoting investments, improving the flow of interstate commerce and appropriately protecting intellectual capital.

This is a win-win-win situation. A win for the public, who deserves safe and sustainable products that provide essential benefits to everyday life.  A win for manufacturers, the nation’s job creators, who will have greater regulatory certainty to continue making better products while growing the economy. And a win for our government who far too often is caught up in partisan politics at the expense of passing policies that will make life better in this country.

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