The Census Bureau said that new durable goods orders increased by 0.8 percent in March, rebounding somewhat after the 3.1 percent decline seen in February. This was weaker-than-expected, with a consensus expecting a gain of 1.8 percent. Sales of new durable goods orders rose from $228.9 billion in February to $230.7 billion in March. Overall, demand remains quite soft, with the sector challenged by global headwinds and lingering anxieties in the economic outlook. Order volumes have been highly volatile from month-to-month over the course of the past year, with sales trending lower since peaking in 2015 at $241.0 billion in July. On a year-over-year basis, new durable goods orders have fallen 2.5 percent, down from $236.7 billion in March 2015. Even with transportation equipment sales excluded, year-over-year growth declined by 1.4 percent, with orders down 0.2 percent for the month, highlighting the broad-based softness of demand for durable goods over the past 12 months. Read More
The Census Bureau said that new factory orders declined by 0.2 percent in November, falling for the third time in the past four months. As such, this report was somewhat disappointing, particularly following the 1.3 percent increase observed in October. New manufactured goods orders decreased from $473.1 billion in October to $472.2 billion in November. On a year-over-year basis, new orders have declined by 4.2 percent, down from $493.0 billion in November 2014. This speaks to the multitude of headwinds hitting the manufacturing sector lately, ranging from currency challenges to reduced commodity prices to sluggish economic growth worldwide.
With durable goods sales unchanged for the month, as noted in preliminary data released earlier, orders for nondurable goods were off 0.4 percent in November. With that said, durable goods orders would have been weaker if transportation equipment data were excluded, mainly because of a large decline in nondefense aircraft demand. These numbers can be quite volatile from month-to-month, where sales are often batched together around key events, such as air shows. Excluding transportation, new factory orders were down 0.3 percent. This speaks to broader weaknesses beyond transportation – something that can be better seen in the year-over-year figures. New factory orders excluding transportation have decreased from $416.8 billion in November 2014 to $390.4 billion in this release, off 6.3 percent.
The Bureau of Labor Statistics said that manufacturing labor productivity jumped 4.9 percent in the third quarter, up from 2.1 percent in the second quarter. It was the fastest quarterly increase in four years, and mostly reflected a modest increase in output (up 2.7 percent) combined with a decline in the number of hours worked (down 2.1 percent). Despite the significant increase in output per hour for all persons working, the decrease in hours worked resulted in a 5.9 percent jump in hourly compensation, and therefore, unit labor costs rose 0.9 percent. In general, we want unit labor costs to fall, as the improvements in efficiency help to make manufacturers more competitive globally. Read More
The Census Bureau said that new factory orders rose 1.8 percent in June, rebounding from declines in both April and May. Indeed, manufacturers’ new orders have decreased in 9 of the past 11 months, with a number of economic headwinds dampening overall demand. On a year-over-year basis, new orders have declined from $510.1 billion in June 2014 to $478.5 billion in this release, or a decrease of 6.2 percent. In June, the gain stemmed largely from strong aircraft sales growth, with transportation equipment sales up 9.3 percent following declines of 4.0 percent and 6.3 percent in April and May, respectively. Aircraft orders can be volatile from month to month, with sales often batched together around large trade shows, and this latest report reflects numbers from the Paris Air Show. If you were to exclude transportation, new factory orders would have risen by a more modest 0.5 percent. Read More
Manufacturing production was unchanged in April, slowing from the 0.3 percent gain experienced in March. Overall, output in the sector has been very soft for five straight months. Manufacturers have struggled with a number of significant headwinds in the U.S. and global economies, including challenges in growing exports, residual impacts from the West Coast ports slowdown, regional weather challenges and an anxious consumer. As a result, the year-over-year pace has slowed from 4.5 percent in November to 2.3 percent in April. Similarly, capacity utilization in manufacturing has dropped from 79.8 percent five months ago to 78.2 percent today.
Durable goods production increased 0.1 percent in April, with output for nondurable goods firms off 0.1 percent. There were strong increases for manufacturing production for nonmetallic mineral products (up 1.4 percent), electrical equipment and appliances (up 1.3 percent), motor vehicles and parts (up 1.3 percent) and wood products (up 1.3 percent). However, these were offset by declining output in the machinery (down 0.9 percent), aerospace and miscellaneous transportation equipment (down 0.6 percent), and food, beverage and tobacco products (down 0.6 percent) sectors, among others. Read More
The Census Bureau said that new durable goods orders declined 1.4 percent in February, falling for the fifth time in the past seven months. Much of the decrease in February stemmed from reductions in the demand for transportation equipment, with new orders in that sector down 3.5 percent in February. This included a reduction in sales for motor vehicles and parts (down 0.5 percent for the month) and fewer nondefense and defense aircraft orders (down 8.9 percent and 33.1 percent, respectively). Note that aircraft orders can be quite volatile from month to month, as nondefense aircraft orders had increased 122.2 percent in January. Therefore, we often look at this data by stripping out the transportation equipment sector, and when you do so, durable goods orders decreased by 0.4 percent – still a soft figure. This mirrors other data showing a number of headwinds dampening demand and output in the early months of 2015. Read More
The Bureau of Labor Statistics said that manufacturers added 22,000 net new workers in January, extending the 26,000 gain observed in December. These data included rather large upward revisions for previous months, and since December 2013, manufacturers have added roughly 18,800 workers per month on average. As such, the manufacturing sector has been making relatively strong gains on the hiring front, with an average of 29,000 over the past four months (October through January). This suggests that momentum in demand and production at the end of 2014 has warranted healthy growth in employment, which is encouraging. Looking at a longer time horizon, manufacturers have added 855,000 workers since 2009. Read More
The Bureau of Labor Statistics said that productivity in the manufacturing sector increased 1.3 percent in the fourth quarter, its slowest pace of 2014. For the year as a whole, labor productivity in the sector rose 2.5 percent, up from 1.0 percent in 2012 and 2.0 percent in 2013. The increase in annual labor productivity in 2014 stemmed from better output data, which grew by 3.9 percent for the year. Indeed, output was stronger in the fourth quarter, as well, up 5.7 percent versus 4.8 percent in the third quarter. In the fourth quarter, unit labor costs edged slightly higher, up 0.2 percent, on higher real compensation costs. Read More
The Census Bureau said that new factory orders fell 3.4 percent in December, extending the 1.7 percent decrease observed in November. It was the fifth straight monthly decline. This disappointing report was foreshadowed by the preliminary durable goods release, which stated that sales had declined in four of the past five months. As such, these data show that manufacturing activity ended 2014 on a weak note, with sluggish global growth dampening demand in the United States. To illustrate the slowness of recent data, manufactured goods orders averaged $498.81 billion per month in 2014 as a whole, but December’s level was just $471.45 billion. On a more encouraging note, the average for new factory orders in 2014 was 2.8 percent higher than the $485.4 billion monthly average seen in 2013. Read More
The Census Bureau said that new durable goods orders rose 0.4 percent in October, increasing for the first time since July. Yet, the October figure was buoyed by higher transportation order sales, which grew 3.4 percent for the month. Orders of motor vehicles and parts were up 0.3 percent for the month and 6.1 percent year-to-date, suggesting that that segment of the manufacturing sector remains quite healthy. Defense aircraft sales were also up sharply in October. Read More