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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A Broad Range of Manufacturers Agree: It’s Long-Past Time to Move the MTB

Today, over 90 companies and associations sent a letter to the two new Chairmen of the House Ways and Means and Senate Finance Committee urging their leadership to move the long-stalled Miscellaneous Tariff Bill (MTB) as quickly as possible. (continue reading…)

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Three Trade Keys to Unlock Growth in Manufacturing and Higher-Paying Jobs

As the Senate Finance and House Ways and Means Committees hold hearings today on “President Obama’s 2015 Trade Agenda,” manufacturers in the United States are emphasizing three key elements of a pro-manufacturing U.S. trade policy that will help unlock growth in manufacturing in the United States and the higher-paying jobs that manufacturing produces – opening global markets, increasing global competitiveness and leveling the playing field.  through strong enforcement:

First it is critical to start with opening global markets as U.S. exporters face higher barriers in foreign markets than most of the rest of the world. According to the World Economic Forum’s “Global Trade Enabling Report 2014,” the United States faces higher tariffs for its exports than all but eight of the 138 countries reviewed, including China, Mexico, Canada and every member state in the European Union. To level the playing field and improve manufacturers’ ability to reach the 95 percent of consumers – who control more than 70 percent of global purchasing power – that are outside are borders, manufacturers are urging: (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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Don’t Be So Quick to Dismiss the Growth Potential of Tax Reform

For a number of years, manufacturers have been calling for an overhaul of our tax system, arguing that a simpler, fairer, more competitive and pro-investment tax system will unleash economic growth and the jobs that go with it. A study we released just last week backs this up.

A Missed Opportunity: the Economic Cost of Delaying Pro-Business Tax Reform, takes a close look at the economic impact of enacting a five-prong pro-business tax package that includes a maximum corporate tax rate of 25 percent; a globally competitive international tax system; full expensing for capital equipment; enhanced and permanent research and development incentives; and parallel changes for non-corporate pass-through businesses. (continue reading…)

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Monday Economic Report – January 26, 2015

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

The European Central Bank (ECB) finally announced its long-awaited quantitative easing program on Thursday. The ECB will purchase 60 million euros in bonds each month until September 2016—totaling at least 1.1 trillion euros overall—in an attempt to stimulate growth. Depending on where the Eurozone economy stands pointing September 2016, the ECB might extend its purchasing beyond that point. The impact on the euro was almost immediate, with the euro exchanging for $1.1206 at Friday’s close, down from $1.3927 on March 17, the high point of 2014. This will complicate manufacturers’ ability to sell goods into Europe, something that was mentioned in the sample comments in the latest Kansas City Federal Reserve Bank’s monthly survey (see below). (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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