Tag: economic outlook

Dallas Fed: Manufacturing Activity Contracted in Texas for the Fifth Straight Month

The Dallas Federal Reserve Bank said that manufacturing activity contracted in Texas for the fifth straight month. The composite index of general business conditions declined from -16.0 in April to -20.8 in May, falling to its lowest level since June 2009. Manufacturers in the district continue to struggle with lower crude oil prices; although, there might also be a sense of stabilization. As one fabricated metal manufacturing respondent said in the sample comments, “With some recovery in the price per barrel of oil, the general feeling is that our business has leveled.”

Still, these data suggest that demand and production remain very weak right now. The underlying data were mostly lower across-the-board, with declines in activity getting larger, at least for now. This included measures for new orders (down from -14.0 to -14.1), production (down from -4.7 to -13.5), shipments (down from -5.6 to -13.2), capacity utilization (down from -10.4 to -11.6), employment (down from 1.8 to -8.2) and hours worked (down from -5.0 to -11.6). Illustrating this point, 31.0 percent of survey respondents cited declining new orders for the month, with just 16.9 percent noting increases. On the other hand, capital expenditures (up from 3.3 to 3.4) continued to expand somewhat modestly, providing some degree of optimism moving forward. (continue reading…)

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Conference Board: Consumer Confidence Rebounded a Little in May

The Conference Board said that consumer sentiment rebounded a little in May. The Consumer Confidence Index has been quite volatile over the past six months, ranging from a low of 91.0 in November to a high of 103.8 in January (a post-recessionary peak).  Confidence plummeted to 94.3 in April, but it edged somewhat higher to 95.4 in May. On the positive side, Americans are more confident today than they were one year ago (when the index was 82.2), and they were slightly more upbeat for the month. Yet, these data indicate that the public remains anxious about employment and income growth, mirroring softer-than-desired economic data in the early months of this year. (continue reading…)

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Richmond Fed: Manufacturing Activity Expanded Ever-So-Slightly in May

The Richmond Federal Reserve Bank said that manufacturing activity expanded ever-so-slightly in May, an improvement after contracting in both March and April. The composite index of general business activity improved from -3 in April to 1 in May. The underlying data were also better, including new orders (up from -6 to 2) and capacity utilization (up from -4 to 7). Shipments (up from -6 to -1) continued to contract, but at a slower pace of decline for the month. At the same time, the labor market was mixed. The rate of employment growth (down from 7 to 3) eased somewhat, but the average workweek (up from 4 to 6) and wages (up from 9 to 20) were stronger. (continue reading…)

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Kansas City Fed Reported Contracting Activity for the Third Consecutive Month in May

The Kansas City Federal Reserve Bank said that manufacturing activity contracted for the third consecutive month in May. The composite index dropped from -7 in April to -13 in May, suggesting a sharper drop in activity than the month before. Indeed, several of the key data points declined at faster rates in May than in April. This included new orders (down from -12 to -19), production (down from -2 to -13), shipments (down from -7 to -9) and the average workweek (down from -10 to -14). At the same time, employment (up from -18 to -17) decreased sharply, and exports (up from -12 to -9) contracted for the fifth straight month, even as both measures fell at slightly slower paces for the month. (continue reading…)

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Philly Fed: Manufacturing Outlook Eased Slightly in May

The Philadelphia Federal Reserve Bank said that the manufacturing outlook eased slightly in May. The composite index of general business activity dropped from 7.5 in April to 6.7 in May. In general, the outlook has weakened so far this year relative to last year, with the headline measure averaging 6.1 through the first five months of 2015. This compares to the more-robust average of 25.1 observed in the second half of 2014, with the softness experienced year-to-date largely the result of a number of headwinds seen in the U.S. and global economy. At the same time, manufacturers in the Philly Fed district have reported expanding levels of activity for 15 straight months. (continue reading…)

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NFIB: Small Business Optimism Ticked Somewhat Higher in April

The National Federation of Independent Business (NFIB) said that optimism rose somewhat in April, rebounding from a much softer March. The Small Business Optimism Index increased from 95.2 in March to 96.9 in April, but remained below the recent peak observed in December (100.4). The December level was the highest since October 2006, but sentiment has been weaker since then as a number of economic headwinds have dampened both activity and the overall outlook to a certain extent. Indeed, this report reflects lingering anxieties about the economy, even as small business owners indicate that they are more upbeat today than they have been in past years. (continue reading…)

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ISM: Headline Number Unchanged at 51.5, but Orders and Production Rebounded a Little

The Institute for Supply Management’s (ISM) manufacturing purchasing managers’ index (PMI) was unchanged at 51.5 in April. On the positive side, manufacturing activity has continued to expand very modestly, and yet, these data reflect softness in the market seen over the past few months. Six months ago, for instance, the PMI value was 57.9, and this headline number has trended lower since then. Demand and output have shifted into a lower gear on challenges from a stronger U.S. dollar, reduced crude oil prices, residual impacts from the West Coast ports slowdown, and other factors. The sample comments note that these headwinds were top-of-mind for survey respondents in this report. (continue reading…)

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The U.S. Economy Stagnated in the First Quarter

I was not surprised today to see the stagnated growth numbers on the latest GDP data (growth of just 0.2 percent for the first quarter of 2015).  For weeks, I have spoken about a number of headwinds in the economy which have negatively impacted manufacturing activity. These challenges have included weaknesses abroad, a strong U.S. dollar, lower crude oil prices, a West Coast ports slowdown, bad weather in some regions of the country and a still-cautious consumer.

From a manufacturing perspective, the real drag on growth has come from the lack of exports and government spending. With softer global growth and an accelerated dollar, it has been harder for U.S. manufacturers to increase demand overseas. Goods exports fell 13.3 percent in the first quarter, with goods imports edging up 0.9 percent. As a whole, the net export of goods and services subtracted 1.25 percentage points from the final real GDP number. Net exports have been a drain on growth in four of the past five quarters. (continue reading…)

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Conference Board: Consumer Confidence Pulled Back Again in April

The Conference Board said that consumer sentiment pulled back again in April. The Consumer Confidence Index has been quite volatile over the past few months. After jumping from 93.1 in December to 103.8 in January (its highest level since August 2007), it has measured 98.8, 101.4 and 95.2 in February, March and April, respectively. Despite the back-and-forth swings each month, the index measuring current conditions has edged lower for three consecutive months, down from 113.9 in January to 106.8 in April. This figure continues to reflect progress in overall attitudes over the longer-term, and yet, it mirrors recent softness in a number of economic data points. (continue reading…)

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Richmond Fed: Manufacturing Activity Contracted for the Second Straight Month in April

The Richmond Fed said that manufacturing activity remained soft in April, contracting for the second straight month. If there was a silver lining, it was that several key indicators declined by less in this report. The composite index of general business conditions improved from -8 in March to -3 in April. Along those lines, the pace of the decline eased for a number of indices, including new orders (up from -13 to -6), shipments (up from -13 to -6) and capacity utilization (up from -7 to -4). It was the third consecutive monthly decrease in new orders, reflecting weaker demand. (continue reading…)

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