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Last updateFri, 19 Jan 2018 7pm

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Philly Fed Manufacturing Index at 5-Month Low

The Philadelphia Fed’s monthly index for current manufacturing activity in the region decreased from a revised reading of 27.9 in December to 22.2 in January. Although now at its lowest reading in five months, the index has stayed within a relatively narrow range over the past eight months. The other broad indicators continue to suggest overall growth. The shipments index remained at a high reading and increased 6 points. The index for current new orders, however, decreased 18 points. Nearly 36% of the firms reported an increase in new orders this month, but 26% reported declines. Both the delivery times and unfilled orders indexes decreased this month: The unfilled orders index was negative for the first time in 16 months, and the index of delivery times fell to its lowest reading in 10 months. 


U.S. Industrial Output Rose 0.9% in December

Industrial production rose 0.9% in December even though manufacturing output only edged up 0.1%. Revisions to mining and utilities altered the pattern of growth for October and November, but the level of the overall index in November was little changed. For the fourth quarter as a whole, total industrial production jumped 8.2% at an annual rate after being held down in the third quarter by Hurricanes Harvey and Irma. At 107.5% of its 2012 average, the index has increased 3.6% since December 2016 for its largest calendar-year gain since 2010.The gain in manufacturing output in December was its fourth consecutive monthly increase. 

Beige Book: Modest to Moderate Growth Prevalent Across U.S.

According to the Federal Reserve Beige Book, reports from the 12 districts indicated that the economy continued to expand from late November through the end of the year, with 11 districts reporting modest to moderate gains and Dallas recording a robust increase. The outlook for 2018 remains optimistic for a majority of contacts across the country.

In general, manufacturing respondents continued to have a broadly positive outlook. No contacts expected the just-passed tax reform package to have a big effect on investment. 

House Unanimously Passes Miscellaneous Tariff Bill

The House of Representatives voted unanimously this week to pass H.R. 4318, the Miscellaneous Tariff Bill (MTB) Act of 2018. This bipartisan, bicameral legislation was written to increase the competitiveness of American manufacturers by temporarily reducing tariffs on nearly 1,700 different products that are not otherwise available in the U.S.

“While it may not make headlines, this is a top story and a big deal for manufacturers. Manufacturers and other businesses face what amounts to a nearly $1-million-a-day tax every additional day this issue goes unresolved. That’s thanks to billions of dollars in burdensome tariffs that companies have had to pay since the last MTB expired at the end of 2012, just for buying the supplies they need to build products in America,” said National Association of Manufacturers president and CEO Jay Timmons. 

Manufacturing Technology Orders Increased in November

Orders for manufacturing technology climbed year over year and year to date in November 2017 according to the Association for Manufacturing Technology (AMT). Orders totaled $425.97 million for the month, up 19.0% compared to November 2016. At a cumulative total of $4.06 billion for the year, orders were up 9.4% compared to the same point in 2016.

With consumer sentiment remaining at strong levels and capacity utilization continuing to move upwards, demand for manufactured goods is expected to stay strong in the coming months. The PMI from the Institute for Supply Management rose to 59.7 in December, the 16th consecutive month of growth. 

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