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economic outlook

Kansas City Fed: Manufacturing Activity Pulled Back in April from March’s Nearly Six Year Highs

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The Kansas City Federal Reserve Bank reported that manufacturing activity pulled back in April from March’s levels, which were the highest since March 2011. The composite index of general business conditions declined from 20 in March to 7 in April, even as it expanded for the fifth straight month. In general, manufacturers report improvements in activity, as noted in the selected comments; yet, they also mentioned the “slow first quarter” and some lingering global headwinds. In some ways, we might have expected some easing in sentiment from the euphoric measures in the prior release. Indeed, many of the underlying data points decelerated sharply in April from those highs, including new orders (down from 32 to 8), production (down from 37 to 12), shipments (down from 35 to 11) and employment (down from 13 to 9). Two other figures were mixed. Exports picked up very slightly for the month (up from 2 to 4), whereas the average workweek narrowed for the first time since November (down from 13 to -4). Read More

Richmond Fed: Manufacturers Report Continued Strong Growth

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The Richmond Federal Reserve Bank said that manufacturing activity in its district continued to expand strongly, even as it pulled back slightly from the fastest rate since April 2010. The composite index of general business activity declined from 22 in March to 20 in April. That was the sixth straight monthly expansion in the mid-Atlantic region. The underlying data were mixed, but still quite encouraging. New orders (unchanged at 26), shipments (up from 17 to 25) and capacity utilization (up from 21 to 22) all grew at healthy rates, with the latter two accelerating their paces for the month. Growth in demand remained at its briskest pace in seven years, which was also positive. Nonetheless, there was also some easing, mirroring the headline number, in the backlog of orders (down from 14 to 4), employment (down from 20 to 5) and average workweek (down from 21 to 8) measures. Read More

Dallas Fed: Manufacturers Continued to Express Expanding Activity

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The Dallas Federal Reserve Bank reported that manufacturing activity expanded in April for the seventh straight month, mostly sustaining the pace seen in March. The composite index of general business conditions edged down from 16.9 in March to 16.8 in April. While the headline number eased ever-so-slightly, the composite index has averaged 18.4 over the past six reports, which would indicate significant progress from contracting conditions as recently as September. The recent gains in business confidence can largely be attributed to better energy commodity prices and from a post-election boost in optimism, especially as it relates to expectations regarding pro-growth policies. Nonetheless, the sample comments suggest that the improvements have not been as broad-based as we might prefer, with some firms seeing large gains in activity while others continue to struggle, at least for now. Read More

Markit: Eurozone Manufacturing Activity Rose Again in April to another Six-Year High

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The Markit Flash Eurozone Manufacturing PMI rose from 56.2 in March to 56.8 in April, its fastest rate since April 2011. While there continues to be a lot of political uncertainty on the continent, survey respondents in the sector have mostly brushed aside such concerns. Instead, they have focused on the fact that the Eurozone economy has trended generally in the right direction in recent months, with activity accelerating at a modest rate, and the headline PMI has trended higher since bottoming out at 51.2 in February 2016. Despite an election in France this weekend that could be quite consequential, depending on the results, manufacturing activity in that country (up from 53.3 to 55.1) accelerated to its fastest rate since April 2011, helping to lift the Eurozone data. At the same time, Germany (down from 58.3 to 58.2) edged slightly lower from its six-year high in April, but remained quite strong. Read More

Philly Fed: Manufacturing Continues to Expand Strongly Despite some Easing in April

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The Federal Reserve Bank of Philadelphia reported that manufacturing activity remained strong in April, even as headline growth has continued to pull back from February’s pace, which was the best reading since November 1983. The composite index of general business activity has decreased from 43.3 in February, to 32.8 in March, to 22.0 in April. Despite the easing in the composite and many of the underlying measures, the data continued to signal a healthy expansion in the district, including new orders (down from 38.6 to 27.4), shipments (down from 32.9 to 23.4), employment (up from 17.5 to 19.9) and the average workweek (up from 18.5 to 18.9). The rate of hiring growth was the fastest since May 2011. On the downside, there have been rising pricing pressures of late (down from 40.7 to 33.7), even as the index for prices paid decelerated somewhat from its highest level in nearly six years. Read More

New York Fed: Manufacturing Activity Expansion Slowed in April

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The Empire State Manufacturing Survey said that manufacturing activity slowed in April, easing from the more robust paces seen in February and March. The composite index of general business conditions declined from 16.4 in March to 5.2 in April, its weakest reading since November. On the positive side, it was the sixth consecutive monthly expansion, continuing to improve from the softer economic environment seen at this point last year. The underlying data in April were mixed. Growth in both new orders (down from 21.3 to 7.0) and the average employee workweek (down from 15.0 to 8.8) decelerated somewhat for the month, mirroring the headline number. More encouragingly, shipments (up from 11.3 to 13.7) and hiring (up from 8.8 to 13.9) each accelerated in April, which was a good sign. Read More

NFIB: Small Business Owners Remained Very Upbeat in March

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The National Federation of Independent Business (NFIB) said that sentiment among small business owners in March remained near the 12-year high seen in January even as it has eased a little since then. The Small Business Optimism Index edged down from 105.3 in February to 104.7 in March, which was not far from the 105.9 reading recorded in January. Over the past four months, the headline index has averaged 105.4, illustrating the sizable uptick in confidence observed since the election. One year ago, the index was 92.6. Along those lines, the percentage of respondents suggesting that the next three months would be a “good time to expand” was unchanged at 22 percent in March. This was down from 25 percent in January but well above the 6 percent who said the same thing in March 2016. Read More

Manufacturing Employment Increased for the Fourth Straight Month

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The Bureau of Labor Statistics said that manufacturing employment increased for the fourth straight month, with the sector adding 11,000 workers in March. This was an encouraging sign that the recent uptick in optimism in the sector has begun to translate into better job growth, especially when contrasted with the declines in employment seen as recently as last autumn. Indeed, manufacturers lost 16,000 workers on net in 2016 as a whole, the first annual decline since the Great Recession. In contrast to that, manufacturing employment has averaged 16,750 per month since December. NAM President and CEO Jay Timmons spoke about the shift in attitudes in his statement about the jobs numbers, stating that manufacturers are upbeat that “positive change is coming,” largely on expectations about pro-growth policies from the new Trump Administration. Read More

ISM: Manufacturing Activity Expanded Rather Strongly in March Despite a Slight Easing

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The Institute for Supply Management’s (ISM) Manufacturing PMI expanded rather strongly in March despite a slight easing in the pace from February’s 2½-year high reading. The composite index declined from 57.7 in February, its fastest rate since August 2014, to 57.2 in March. More importantly, it was the seventh straight monthly expansion in the headline number, recognizing definite progress after two years of notable challenges in the sector. Indeed, the sample comments tended to echo improvements in manufacturing activity, citing the better economic conditions and robust sales. This finding also mirrors the most recent NAM Manufacturers’ Outlook Survey, which found confidence rising to its highest point in the survey’s nearly 20-year history. Read More

Richmond Fed: Manufacturing Growth at Fastest Rate in Nearly Seven Years

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The Richmond Federal Reserve Bank said that manufacturing activity in its district expanded at its fastest rate since April 2010. The composite index of general business activity increased from 17 in February to 22 in March. That was the fifth straight monthly expansion in the mid-Atlantic region. Indeed, new orders (up from 24 to 26), shipments (up from 16 to 17), capacity utilization (up from 15 to 21), employment (up from 10 to 20) and the average workweek (up from 16 to 21) each accelerated somewhat in the latest survey. Growth in demand also grew at its briskest pace in nearly seven years, which should bode well for activity moving forward, particularly if it can be sustained. Read More