05242017Wed
Last updateWed, 24 May 2017 2pm

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Leading Economic Indicators for the U.S. Increased in April

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.3% in April to 126.9 (2010 = 100), following a 0.3% increase in March, and a 0.5% increase in February.

“The recent trend in the U.S. LEI, led by the positive outlook of consumers and financial markets, continues to point to a growing economy, perhaps even a cyclical pickup,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “First quarter’s weak GDP growth is likely a temporary hiccup as the economy returns to its long-term trend of about 2%. While the majority of leading indicators have been contributing positively in recent months, housing permits followed by average workweek in manufacturing have been the sources of weakness among the U.S. LEI components.” 


ISM: Manufacturing Growth Should Continue Through 2017

According to the Institute for Supply Management (ISM), 64% of respondents from the panel of manufacturing supply management executives predict their revenues will be 8.5% greater in 2017 compared to 2016, 12% expect a 9.6% decline, and 24% foresee no change in revenue. This yields an overall average forecast of 4.4% revenue growth among manufacturers for 2017. This current prediction is 0.2% below the December 2016 forecast of 4.6% revenue growth for 2017, but is 3.5% above the actual revenue growth reported for all of 2016. With operating capacity at 82.5%, an expected capital expenditure increase of 5.2%, an increase of 2.5% for prices paid for raw materials, and employment expected to increase by 1.3% by the end of 2017 compared to the end of 2016, manufacturing is positioned to grow revenues while managing costs through the remainder of the year. 

DOL Secretary Pushes Public-Private Apprenticeships

Speaking at the G-20 labor and employment ministers' meeting on May 19, U.S. Secretary of Labor Alexander Acosta emphasized his support for fostering the growth of apprenticeships, a major priority for President Trump and the Department of Labor. The secretary's remarks reinforce the U.S.’s commitment to increasing the number of quality apprenticeships, including expansion into high-growth, emerging sectors where apprenticeships have historically been rare.

“CEO after CEO has told me that they are eager to fill their vacancies, but they cannot find workers with the right skills,” said Acosta. 

Mid-Atlantic Region Factory Activity Accelerates in May

The index for current manufacturing activity in the mid-Atlantic region increased from a reading of 22.0 in April to 38.8 this month. The index has been positive for 10 consecutive months. This month, the index recovered some of the declines of the previous two months, but it still remains slightly below its high reading of 43.3 in February. According to the Philadelphia Fed, 51% of the firms indicated increases in activity in May, while 13% reported decreases. The current new orders and shipments indexes remained at high readings. The shipments index increased 16 points, while the new orders index declined 2 points. Both the delivery times and unfilled orders indexes were positive for the seventh consecutive month, suggesting longer delivery times and increases in unfilled orders. 

U.S. Economy Forecast for 4.1% Second Quarter Growth

The Atlanta Federal Reserve Bank’s GDPNow model forecast for real GDP growth in the second quarter of 2017 is now 4.1%, up from 3.6% on May 12.

The forecast of second-quarter real final sales to private domestic purchasers growth increased from 3.3% to 3.6% after the latest industrial production report from the Federal Reserve Board of Governors. The model’s estimate of the dynamic factor for April increased from 0.32 to 0.59 after the report. The forecast of the contribution of inventory investment to second-quarter real GDP growth increased from 1.00% to 1.20% after the report. 

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