07302016Sat
Last updateFri, 29 Jul 2016 2pm

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Second Quarter GDP Grew Only 1.2% in Second Quarter

Real GDP in the U.S. increased at an annual rate of 1.2% in the second quarter of 2016, according to the advance estimate released by the U.S. Department of Commerce. In the first quarter, real GDP increased 0.8%.

The increase in real GDP in the second quarter reflected positive contributions from consumer spending and exports that were partly offset by negative contributions from private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased. 


U.S. Durable Goods Orders Down 4% in June

New orders for manufactured durable goods in June decreased $9.3 billion or 4.0% to $219.8 billion, the U.S. Department of Commerce announced. This decrease, down two consecutive months, followed a 2.8% May decrease. Excluding transportation, new orders decreased 0.5%. Excluding defense, new orders decreased 3.9%.

“One small bright spot: Orders for core capital goods, viewed as a proxy for business investment, edged up 0.2% in June after falling in the prior two months. It’s only the second increase of the year, however.” 

Sharpest Rise in U.S. Manufacturing Production Since November

July data signaled a further rebound in business conditions across the U.S. manufacturing sector, led by a robust expansion of incoming new work and the fastest upturn in production volumes for eight months. Job creation also strengthened in July, with the latest increase in payroll numbers the fastest seen over the past 12 months. At the same time, input cost inflation edged up to its strongest since November 2014 but factory gate prices rose only marginally.

At 52.9 in July, up from 51.3 in June, the seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) pointed to a solid improvement in overall business conditions. Moreover, the headline index continued to recover from its post-crisis low seen in May, with the latest reading the strongest since October 2015. Faster rises in output, new orders and employment were the key positive influences in July, while sustained inventory cutbacks acted as a drag on the PMI. 

Texas Manufacturing Activity Stabilizes

Texas factory activity held steady in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, came in near zero after two months of negative readings, suggesting output stopped falling this month.

Some other measures of current manufacturing activity also reflected stabilization, and demand declines abated somewhat. The capacity utilization and shipments indexes posted near-zero readings, up from negative territory in May and June.

Perceptions of broader business conditions were notably less pessimistic. While the general business activity index remained negative for a nineteenth month in a row, it jumped 17 points to –1.3 in July, the highest figure since Dec. 2014. 

STEM Jobs in the U.S. Growing Faster Than Other Fields

The U.S. Department of Commerce estimates that jobs in STEM will grow 17% by 2018—that’s 55% faster than non-STEM jobs over the next decade. Several reports have linked STEM education to the continued scientific leadership and economic growth of the U.S. However, economic projections also predict that there could be as many as 2.4 million unfilled STEM jobs by 2018, according to a new whitepaper from the National PTA. 

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