Economy

Manufacturing Compensation Increased 2.4 Percent in 2014

The Bureau of Labor Statistics (BLS) said that employer costs rose 0.7 percent in the fourth quarter, extending the 0.6 percent gain in the third quarter. Wages and salaries in the sector were up 0.7 percent in the fourth quarter, and benefits increased by 0.8 percent. On a year-over-year basis, manufacturing workers earned 2.4 percent more in 2014, up from 1.8 percent in 2013. This was the fastest pace of compensation growth for manufacturers in three years.  In 2014, wages and salaries and benefits costs increased 2.3 percent and 2.8 percent, respectively. (continue reading…)

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The U.S. Economy Grew 2.6 Percent in the Fourth Quarter, or 2.4 Percent for 2014 as a Whole

The Bureau of Economic Analysis said that the U.S. economy grew 2.6 percent in the fourth quarter, somewhat slower than the consensus estimate of around 3 percent. This was down from the 4.6 percent and 5.0 percent growth rates experienced in the second and third quarters, respectively, and for 2014 as a whole, real gross domestic product (GDP) rose 2.4 percent. The annual figure was not too far from the 2.2 percent pace observed in 2013, but that somewhat understates the strength of the economy since the weather-related weaknesses of the first quarter. Indeed, real GDP grew an annualized 4.1 percent over the last three quarters of 2014.   (continue reading…)

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Conference Board: Consumer Confidence at Highest Level Since August 2007

Consumer confidence rose to its highest level since August 2007, just a few months before the start of the Great Recession. The Consumer Confidence Index from the Conference Board increased from 93.1 in December to 102.9 in January. The increase in perceptions was more than likely positively influenced by lower gasoline prices and better economic news of late. Indeed, the index of present conditions, which gauges sentiment on the current economic environment, jumped from 99.9 to 112.6. The forward-looking subcomponent also improved, up from 88.5 to 96.4. (continue reading…)

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Richmond Fed: Manufacturing Activity Continues to Grow Modestly

The Richmond Federal Reserve Bank said that manufacturing activity continued to expand modestly in January. The composite index of general business conditions edged marginally lower, down from 7 in December to 6 in January. While this represented a slower pace than the more-robust growth seen in October, when the composite index measured 20, it did represent the tenth consecutive monthly expansion in the Richmond Fed district. Moreover, growth in shipments (up from 5 to 10), capacity utilization (up from -5 to 9) and the average workweek (up from 4 to 8) accelerated for the month, which were encouraging signs. (continue reading…)

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Durable Goods Orders Were Disappointing in December

The Census Bureau said that new durable goods orders fell 3.4 percent in December, ending the year on a weak note. Orders for durable goods declined in four of the past five months. As such, manufacturing activity in the second half of 2014 was less-than-desired, providing a bit of a contrast with better demand and sentiment data elsewhere. The sluggish global economic environment probably played a role in this softness. On a year-over-year basis, durable goods orders have risen only 0.3 percent since December 2013. On the other hand, they were up 2.9 percent from the weather-related slowdown of January. (continue reading…)

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Dallas Fed: Reduced Energy Prices Have Weakened Manufacturing Activity

Texas manufacturers have been hurt by lower petroleum prices. The Dallas Federal Reserve Bank said that manufacturing activity contracted in its district for the first time since May 2013, with reduced energy prices weakening demand and dampening the outlook. The composite index of general business activity has declined from 10.1 in November to 3.5 in December to -4.4 in January. The bulk of the sample comments, for instance, mentioned crude oil prices, both for those in the energy supply chain and from others who are worried about the impacts on the broader Texas economy.   (continue reading…)

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Business Economists Were More Optimistic in the Latest Industry Survey

The National Association for Business Economics (NABE) said that sales and earnings have improved, with a mostly upbeat outlook for 2015. The latest Business Conditions Survey observed that industry participants were more optimistic in January than they were in October. The percentage of respondents saying that their sales were rising increased from 49 percent three months ago to 54 percent now. This was somewhat offset, however, by an increase in the percentage suggesting that their sales were falling, up from 7 percent to 15 percent. Therefore, the news on current demand was mixed. Still, business leaders continue to be positive moving forward, with 69 percent of goods-producing respondents expecting sales to rise in the next three months, up from 58 percent in October. (continue reading…)

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January Chinese and Eurozone PMI Figures Move Higher, But Global Softness Remains

Even as the global economy remains soft, there were some signs of stabilization in Asia and Europe, according to the most recent purchasing managers’ index (PMI) data. The Markit Flash Eurozone Manufacturing PMI increased from 50.6 in December to 51.0 in January. This was the highest level since July. The pace of growth for new orders (up from 50.2 to 50.4), output (up from 50.9 to 52.2) and employment (up from 50.6 to 50.9) each picked up somewhat. At the same time, exports (down from 51.6 to 50.7) eased slightly but continued to expand. (continue reading…)

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Kansas City Fed: Manufacturers Began the New Year on a Softer Note

The Kansas City Federal Reserve Bank said that manufacturing activity slowed in January, beginning the new year on a softer note. The composite index of general business conditions dropped from 8 in December to 3 in January, its lowest level in five months. Underlying this figure, new orders (down from 14 to -8), production (down from 7 to -2), shipments (down from 8 to -5) and exports (down from zero to -7) declined for the month, and hiring (down from 8 to zero) stagnated. On the positive side, it was the 13th straight month with expanding levels of sentiment, and manufacturers remain mostly optimistic about the coming months. (continue reading…)

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Housing Starts Rebounded in December, with Progress from Earlier in the Year

The Census Bureau and the U.S. Department of Housing and Urban Development said that new residential construction rebounded in December. New housing starts rose from an annualized 1,043,000 in November to 1,089,000 in December. These data have been up and down for much of the second half of 2014, with December’s value not far from October’s 1,092,000 reading. The underlying story, however, is one of progress. Housing starts averaged 1,052,167 in the second half of 2014, which was a nice improvement from the 955,167 average observed in the first half. In continue to predict that housing starts will exceed 1.1 million in the coming months, and this latest data are relatively close to that mark. (continue reading…)

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