Tag: economic outlook

ISM: Manufacturing Sentiment Edged Lower, but Domestic Sales and Output Growth Ticked Higher

The Institute for Supply Management’s manufacturing purchasing managers’ index (PMI) edged somewhat lower in July, bucking expectations for a slight gain. The headline PMI decreased from 53.5 in June to 52.7 in July. Yet, even with reduced sentiment for the month, the index averaged 53.0 over the past three months (May through July), up from 52.0 over the prior three months (February through April). While manufacturing activity has been weaker than what we saw at the end of last year – with the index averaging 56.9 in the fourth quarter of 2014 – these data continue to reflect a slight rebound in demand and output after softness earlier in the year. Along those lines, growth in both new orders (up from 56.0 to 56.5) and production (up from 54.0 to 56.) ticked higher in July, expanding at a decent but still less-than-desired pace. (continue reading…)

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Kansas City Fed: Manufacturing Activity Declined for the Fifth Straight Month in July

The Kansas City Federal Reserve Bank said that manufacturing activity declined for the fifth straight month in July, albeit at a slower pace than in either May or June. The composite index of general business conditions increased from -13 in May to -9 in June to -7 in July. Overall, manufacturers continue to report contracting levels of activity, with reduced crude oil prices, the strong dollar and weaknesses abroad pressuring the sector’s performance. Indeed, various measures of activity were negative across-the-board, even with some of them showing a slower rate of decline for the month. This included new orders (down from -3 to -6), production (up from -21 to -5), shipments (up from -15 to -2) and exports (down from -5 to -10). Exports have now declined for seven consecutive months. (continue reading…)

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Business Economists Noted Slower Growth in Sales in July than Earlier in the Year

The National Association for Business Economics (NABE) said that activity slowed somewhat from earlier in the year, mirroring other indicators. In the latest Business Conditions Survey, respondents noted slightly weaker conditions than in prior reports, and yet, they also remained mostly upbeat about the second half of 2015. The net rising index for sales, for instance, has declined from 45 in July 2014 to 28 in this survey, with the percentage of those completing the survey observing rising sales dropping from 57 percent one year ago to 49 percent in April to 46 percent in July. Despite the drop in demand growth, this release continues to show sales growth that is more favorable than not, with just 18 percent of respondents citing declining sales in July. Along those lines, 59 percent of industry economists anticipate sales increases over the next three months. (continue reading…)

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Philly Fed: Growth in Manufacturing Activity Slowed Somewhat in July

The Federal Reserve Bank of Philadelphia said that growth in the manufacturing sector in its district slowed somewhat in July. The composite index of general business activity decreased from 15.2 in June, its highest level so far in 2015, to 6.7 in July. This suggests some deceleration in the expansion rate, leading more respondents to indicate declines in several key underlying data points. For instance, the percentage of manufacturers suggesting that their new orders had decreased in the month rose from 19.7 percent in June to 24.7 percent in July. This corresponded to the percentage of respondents citing increased new orders dropping from 35.0 percent to 31.7 percent. As such, the new orders index dropped from 15.2 to 7.1 – a reading that suggests a modest expansion in demand in June, even as the growth rate eased from a more-robust pace in July. (continue reading…)

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NY Fed: Manufacturing Activity Rebounded Somewhat in July

The Empire State Manufacturing Survey said that activity rebounded somewhat in July. The composite index of general business conditions from the New York Federal Reserve Bank improved from -2.0 in June to 3.9 in July, indicating a slight expansion in activity for the month. Nonetheless, even with better data in July, the year-to-date average for this composite measure was just 4.1, suggesting only modest growth for the sector. This compared to an average of 13.8 in the second half of 2014, showing a deceleration in the overall growth rate as a number of economic headwinds have dampened activity in the New York Fed’s district. (continue reading…)

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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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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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ISM: Manufacturing Activity Picked Up Somewhat in June

The Institute for Supply Management’s manufacturing purchasing managers’ index picked up a little in June. The headline PMI increased from 52.8 in May to 53.5 in June, returning to a level last seen in January. As such, this report indicates that manufacturing activity has begun to recover from the softer demand, output and hiring levels experienced earlier in the year, with a number of economic headlines challenging the sector. Still, that does not mean that manufacturers are out of the woods yet, with activity expanding at a slower pace than desired. To illustrate this point, the manufacturing PMI averaged 56.9 in the second half of 2014, but has averaged 52.6 through the first six months of 2015. (continue reading…)

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Conference Board: Consumer Confidence Jumped Higher in June

The Conference Board said that consumer sentiment jumped higher in June. The Consumer Confidence Index increased from 94.6 in May to 101.4 in June, matching its level of March and coming after two months of softness in the data. Sentiment continues to remain below the post-recessionary peak observed in January (103.8), but overall, this report suggests that Americans’ attitudes have rebounded from weaknesses earlier in the year. In addition, confidence has risen from one year ago when the index was 86.4. Despite these improvements, the public continues to remain somewhat anxious about labor and income growth. (continue reading…)

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First Quarter Real GDP Upwardly Revised to a Decline of 0.2 Percent

The Bureau of Economic Analysis said that the U.S. economy shrank by 0.2 percent in the first quarter. This second revision was an improvement upon the 0.7 percent decline seen in the previous estimate. Looking at the newer data, the improvement came from slightly better figures for personal consumption, nonresidential fixed investments, inventory replenishment, and state and local government spending. Yet, the underlying trends were not altered much, including the following:

  • The largest drag on growth in the first quarter was from net exports, subtracting 1.9 percentage points from the headline number. In this revision, the decline in goods exports was slower than in the prior release (down 7.5 percent instead of 14.0 percent), but this was offset by a bigger increase in goods imports (up 7.2 percent instead of 5.1 percent). International demand for manufactured goods exports has been dampened by the strong dollar and continued softness in economic markets abroad. (continue reading…)
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