08272016Sat
Last updateThu, 25 Aug 2016 4pm

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Manufacturing Productivity in U.S. Higher Than Other Nations

“U.S. productivity unexpectedly declined for a third straight quarter in the three months through June, Labor Department figures showed. On a year-over-year basis, it fell for the first time since 2013,” Bloomberg reports.

But on a more positive note, “the U.S. still blows other nations out of the water, at least in terms of manufacturing productivity by both foreign and domestic firms, according to data compiled by the Boston Consulting Group.” 


Durable Goods Orders Up 4.4%, a Six-Month High

New orders for manufactured durable goods in July increased $9.7 billion or 4.4% to $228.9 billion, the U.S. Commerce Department announced. This increase, up following two consecutive monthly decreases, followed a 4.2% June decrease. Excluding transportation, new orders increased 1.5%. Excluding defense, new orders increased 3.8%.

“Sal Guatieri, senior economist at BMO Capital Markets, said he believed a modest rebound in investment spending would help boost gross domestic product growth to around 3.8% in the current July-September, up from the anemic 1.2% growth rate in the April-June quarter,” the Associated Press reports.

Manufacturing Output Up, Firms Signal Softer Expansion in New Work

U.S. goods producers saw a further upturn in overall business conditions during August, though the rate of improvement was softer than seen in July. While output continued to rise markedly, total new work rose at a slower pace and employment expanded at the weakest rate in four months. Meanwhile, companies reported near-stagnant price trends overall, with input prices rising only marginally and companies leaving their prices charged unchanged from the previous month.

The seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) registered at 52.1 in August, down from July’s nine-month high of 52.9. The PMI has now pointed to improving business conditions in each month since October 2009. However, August’s reading pointed to a moderate rate of improvement that was weaker the post-crisis average. 

Leading Economic Indicators Gained Ground in July

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.4% in July to 124.3, following a 0.3% increase in June, and a 0.2% decline in May.

“The U.S. LEI picked up again in July, suggesting moderate economic growth should continue through the end of 2016,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “There may even be some moderate upside growth potential if recent improvements in manufacturing and construction are sustained, and average consumer expectations don’t deteriorate further.” 

Federal Reserve: Industrial Production Up 0.7%

Industrial production rose 0.7% in July after moving up 0.4% in June. The advance in July was the largest for the index since November 2014. Manufacturing output increased 0.5% in July for its largest gain since July 2015. The index for utilities rose 2.1% as a result of warmer-than-usual weather in July.

Manufacturing output rose 0.5% in July, and production was 0.2% above its level of a year earlier. In July, durables, nondurables and other manufacturing (publishing and logging) all recorded gains of about 0.5%. Among durables, increases of more than 1% occurred in motor vehicles and parts, wood products and miscellaneous goods. 

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