Manufacturing Production Was Unchanged for the Second Straight Month in June

Manufacturing production was unchanged in both May and June, suggesting that output in the sector remains sluggish. On the positive side, the May figure was revised higher, as it was originally estimated to be a decline of 0.2 percent. Yet, it is clear that manufacturers continue to grapple with a number of economic headwinds, including a stronger U.S. dollar, lower crude oil prices and weaknesses abroad. The year-over-year pace reflects this softness, shifting from a more-robust pace of 4.5 percent in November to just 1.8 percent today. Capacity utilization for manufacturers has also eased over that time frame, down from 78.1 percent in November to 77.2 percent in June.   (continue reading…)

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Producer Prices Were Higher in June, Extending the Gains Seen in May

The Bureau of Labor Statistics said that producer prices for final demand goods and services rose 0.4 percent in June, extending the 0.5 percent increase seen in May. The gains for the goods sector were even stronger. Indeed, producer prices for final demand goods jumped 1.3 percent and 0.7 percent, respectively, in May and June, with each month spurred higher by rising energy and food costs. On the energy front, energy goods were 5.9 percent and 2.4 percent more expensive in those two months, respectively. This was consistent with the rise in West Texas intermediate crude oil prices, up from an average of $54.45 per barrel in April to $59.82 a barrel in June. At the same time, final demand energy goods costs remain 17.9 percent lower today than 12 months ago. (continue reading…)

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NFIB: Small Business Optimism Dipped in June after Rebounding in Prior Two Months

The National Federation of Independent Business (NFIB) said that optimism dipped in June after rebounding in the prior two months. The Small Business Optimism Index declined from 98.3 in May to 94.1 in June, its lowest level in 15 months. As such, it suggests that sentiment has once again moved in the wrong direction, reversing signs of progress in April and May. In addition, it remained below the peak observed in December (100.4), which was the highest level since October 2006. The percentage of respondents suggesting that the next three months would be a “good time to expand” dropped from 14 percent to 9 percent, with 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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Retail Sales Pulled Back Again in June

The Census Bureau said that retail sales fell by 0.3 percent in June, pulling back from the 1.0 percent gain seen in May. The decline was unexpected, with a consensus anticipation of a slight increase. It was the first decrease in retail spending since February, and it suggests that the public continues to remain somewhat cautious in their willingness to open their pocketbooks. The year-over-year pace was a disappointing 1.4 percent, down from 2.3 percent in May and well below the 4.7 percent rate observed in November. (continue reading…)

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Hawaii: A Rapidly Growing Hub for Manufacturing

When people think of Hawaii, they tend to think about warm sunny beaches, palm trees and volcanoes. What they may not realize is the presence of manufacturing in the state and what a huge generator it is for the state’s economy. Manufacturers employed 13,500 workers in Hawaii in May. In addition, manufacturing activity continues to accelerate, with output in the sector growing from $1.3 billion in 2010 to $1.5 billion in 2014. That represents roughly two percent of overall gross state product – a ratio that we anticipate will grow moving forward. (continue reading…)

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JOLTS: Manufacturing Job Openings at their Highest Levels in Nearly 8 Years

The Bureau of Labor Statistics said that manufacturing job openings neared an 8-year high in May. The Job Openings and Labor Turnover Survey (JOLTS) release noted that job posting in the sector rose from 335,000 in April to 347,000, the highest level since July 2007. This continues an upward trend for openings among manufacturers, with an average of 332,000 through the first five months of 2015, up from an average of 290,000 for all of 2014. More importantly, it could indicate stronger hiring activity moving forward, which has been quite weak so far this year, mirroring softer economic data in general. (continue reading…)

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U.S. Trade Deficit Edged Slightly Higher in May, Oil Imports at Lowest in 13 Years

The Bureau of Economic Analysis and the Census Bureau said that the U.S. trade deficit edged slightly higher, up from $40.70 billion in April to $41.87 billion in May. The deficit has been highly volatile so far this year, ranging from $37.25 billion in February to $50.57 billion in March, but the year-to-date average of $42.57 billion in 2015 is nearly identical to the $42.36 billion average observed in all of 2014. The May increase stemmed largely from a decline in goods exports (down from $129.34 billion to $127.72 billion) that more than offset the decrease in goods imports (down from $189.65 billion to $189.23 billion). At the same time, the service sector trade surplus inched up marginally from $19.62 billion to $19.64 billion. (continue reading…)

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Burdensome, Costly and Useless?

Manufacturers in the United States are the most productive in the world, far surpassing the worker productivity of any other major manufacturing economy, leading to higher wages and living standards. Unfortunately, one of the largest hurdles facing manufacturers is our own federal government. If it would put the right policies in place, our manufacturing engine would be even stronger, which is why the NAM submitted comments late yesterday afternoon, to the Securities Exchange Commission (SEC) articulating its concerns about two potentially burdensome and costly proposed rules.  Both proposed rules are reporting requirements that come courtesy of the regulatory burdens created by the Dodd-Frank Wall Street Reform and Consumer Protection (Dodd-Frank) Act.    (continue reading…)

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NAM, Business Groups Launch New Corporate Governance Coalition

In a letter sent to the SEC July 2, the NAM joined more than a dozen associations representing businesses of all sizes in announcing the formation of a new coalition that will tackle shareholder activism and other important corporate governance issues. The Corporate Governance Coalition for Investor Value will work to advocate for strong corporate governance policies that promote long-term growth and value for shareholders. (continue reading…)

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Manufacturing Employment Increased by 4,000 in June

The Bureau of Labor Statistics said that manufacturers added 4,000 net new workers in June. This was slightly lower than the 7,000 additional employees added in May, and in general, it continues a softer-than-desired pace for the first half of 2015, particularly over the past five months. The sector added an average of just 6,167 workers per month in the first half of this year, a much slower rate of hiring than observed in the second half of 2014, which averaged 20,667 per month. The good news is that manufacturing job gains were positive in both May and June, recovering from being flat in April. (continue reading…)

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