Housing Starts Exceed 1.2 Million, Reach their Fastest Pace since October 2007

The Census Bureau and the U.S. Department of Housing and Urban Development said that new housing starts now exceed 1.2 million, reaching their fastest pace in July since October 2007. New housing starts edged marginally higher, up from a revised 1,204,000 units at the annual rate in June to 1,206,000 in July. (June’s figure was originally estimated to be 1,174,000.) This report suggests that the housing market has gained some steam, improving from softness earlier in the year. To illustrate this progress, housing starts averaged 1,039,200 through the first five months of 2015. In addition, housing starts have increased 10.8 percent year-over-year. (continue reading…)

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NY Fed: Manufacturing Activity Contracted in August at Steepest Rate since the Recession

The Empire State Manufacturing Survey contracted in August at the steepest rate since the Great Recession. The composite index of general business conditions from the New York Federal Reserve Bank declined sharply from 3.9 in July to -14.9 in August, the lowest level since April 2009. With that said, the Empire State survey’s headline figure has bounced around a lot over the past five months, up one month and then down the next. It was contracted three times in that time frame. Overall, it is safe to suggest that manufacturers in the New York Fed region continue to report softness in the current economic environment, led by reduced demand and shipments, even as they remain cautiously upbeat moving forward. (continue reading…)

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Manufacturing Production Rebounded in July, but June’s Numbers were Revised Lower

Manufacturing production rebounded strongly in July, up 0.8 percent, but those gains came from a June figure that was revised lower, down 0.3 percent. Output in the sector was originally estimated to be flat in June. (Note that the data were also updated with a new base year, changing it from 2007=100 to 2012=100.) Capacity utilization for manufacturers increased from 75.7 percent to 76.2 percent. On a year-over-year basis, manufacturing production increased 1.5 percent in July, up from 1.4 percent in June. This represented a sharp deceleration in output from the quite-robust 6.0 percent year-over-year pace observed in January, and it reflects a number of significant headwinds facing manufacturers so far this year. This includes a stronger U.S. dollar, lower crude oil prices and weaknesses abroad. (continue reading…)

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Producer Prices Were Higher in July, Slowing from the Rate Seen in June

The Bureau of Labor Statistics said that producer prices for final demand goods and services rose 0.2 percent in July, slowing from the 0.4 percent growth rate seen in June. At the same time, producer prices for final demand goods declined 0.1 percent, with reduced energy and food costs pulling the index lower. It was the first decrease in the goods index since April. Looking specifically at energy costs, final demand energy goods fell 0.6 percent for the month, ending two months of significant gains. Indeed, the average price of West Texas intermediate crude oil fell from $59.82 per gallon in June to $50.90 in July. (It has fallen further since then, closing at $42.23 a gallon on August 13 – its lowest level since March 2009.) To be fair, final demand energy goods costs were 17.7 percent lower in July than 12 months ago. (continue reading…)

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Exporters for Ex-Im: Chief Pickle Officer Needs Ex-Im to Continue Overseas Sales

That’s not a “typo” in the blog title – Jenny Fulton is the owner and “Chief Pickle Officer” of North Carolina-based Miss Jenny’s Pickles.  Fulton, like so many other small business owners and exporters throughout the United States, uses the U.S. Export-Import (Ex-Im) to insure her overseas pickle exports.  Through using the Ex-Im’s credit insurance, Jenny’s Pickles has been able to carve out a niche in the international market, which is something the company would likely not have been able to do otherwise.  (continue reading…)

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Retail Sales Bounced Back in July after Being Unchanged in June

The Census Bureau said that retail sales increased 0.6 percent in July, bouncing back from being unchanged in June. The prior month’s softness had been unexpected, making the rebound in July more welcome. The year-over-year pace improved from a disappointing 1.3 percent pace in April to 2.4 percent in July. Needless to say, even that modest rate of consumer spending suggests that the public remains somewhat cautious in their willingness to open their pocketbooks. As an illustration of that point, retail sales growth was 4.7 percent year-over-year in November, or almost double the current pace. (continue reading…)

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JOLTS: Manufacturing Job Openings Pulled Back Somewhat in June, but Remained Encouraging

The Bureau of Labor Statistics said that manufacturing job openings pulled back somewhat in June. The Job Openings and Labor Turnover Survey (JOLTS) said that job postings in the sector declined from 333,000 in May to 308,000 in June. The May pace had been the highest since July 2007 (even as it was revised down from the original estimate of 347,000). Despite the easing, this continues an upward trend for openings for manufacturers, with an average of 326,000 through the first six months of 2015, up from an average of 290,000 for all of 2014. More importantly, the increased rate of job openings should bode well for stronger hiring activity moving forward. (continue reading…)

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NFIB: Small Business Optimism Increased a Little in July, with Owners Still Somewhat Anxious

The National Federation of Independent Business (NFIB) said that optimism increased a little in July, partially rebounding from the decline seen in June. The Small Business Optimism Index rose from 94.1 in June to 95.4 in July, but this figure remains below the 98.3 registered in May. As such, the data pointed to progress for the month, even as it continued to highlight nagging anxieties about the economy. Index values under 100 usually coincide with softer economic growth for small firms. On the positive side, the percentage of respondents saying that it was a “good time to expand” jumped from 9 percent to 12 percent for the month, which, while encouraging, remained somewhat below the 16 percent observed in December. Economic conditions and the political climate cited as the top concerns for those suggesting that was not the right time for expansion. (continue reading…)

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Manufacturing Productivity Rebounded Modestly in the Second Quarter

The Bureau of Labor Statistics said that manufacturing labor productivity increased 2.5 percent in the second quarter, rebounding modestly from the 0.6 percent decline seen in the first quarter. In the second quarter, output rose 1.5 percent, with hours worked decreasing by 1.0 percent. This resulted in unit labor costs falling by 2.3 percent, helping to make the sector more competitive globally and improving upon the weaker-than-desired performance seen at the beginning of the year.

Breaking the second quarter data down further, productivity for durable goods manufacturers grew 3.4 percent, more than outpacing the 1.2 percent gains experienced by nondurable goods firms. Durable goods businesses accomplished this feat with a 1.6 percent decline in hours worked, which reduced unit labor costs by 3.3 percent. For nondurable goods entities, unit labor costs declined by 0.6 percent, with output and hours worked up by 1.3 percent and 0.1 percent, respectively. (continue reading…)

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Manufacturers Added 15,000 Workers in July, the Fastest Pace Since January

The Bureau of Labor Statistics said that manufacturers added 15,000 net new workers in July, the fastest pace since January. This was an encouraging figure – one that is closer to the monthly average of last year when activity in the sector was growing more robustly. Yet, it is important to note that manufacturing employment growth in the sector was more spotty than we might prefer, suggesting that we are not out of the woods yet from recent weaknesses. Nondurable goods firms added 23,000 workers, led by food (up 9,100), plastics and rubber products (up 5,800), paper and paper products (up 2,500) and petroleum and coal products (up 1,400). In contrast, durable goods hiring remained challenged, down by 8,000. The largest declines were seen in the computer and electronic products (down 3,100), machinery (down 1,600), motor vehicles and parts (down 1,400) and primary metals (down 1,100). (continue reading…)

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