Last updateTue, 17 Oct 2017 3pm


Texas Manufacturing Activity Expanded in August

Texas factory activity continued to increase in August, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, edged down to 20.3, indicating output grew but at a slightly slower pace than in July.

Other measures of current manufacturing activity also indicated continued growth. The new orders and the growth rate of orders indexes ticked down but stayed solidly positive, coming in at 14.3 and 11.7, respectively. The capacity utilization index fell six points to 12.2, while the shipments index increased seven points to 18.1.

Perceptions of broader business conditions remained positive in August. The general business activity index was largely unchanged at a robust 17.0. The company outlook index posted its 12th consecutive positive reading but slipped 10 points to 16.3 after surging to a multiyear high last month. 

U.S. Factory Orders Fell 3.3% in July

New orders for manufactured goods in July, down three of the last four months, decreased $15.8 billion or 3.3% to $466.4 billion, the U.S. Commerce Department reported Tuesday. This followed a 3.2% June increase. Transportation equipment, also down three of the last four months, drove the decrease, $17.6 billion or 19.2% to $74.1 billion.

Shipments of manufactured goods, up seven of the last eight months, increased $1.6 billion or 0.3% to $474.3 billion. Inventories in July, up twelve of the last thirteen months, increased $1.3 billion or 0.3% to $398.7 billion. 

Manufacturing Expanded at Fastest Pace in More Than Six Years

According to the Institute for Supply Management (ISM), manufacturing expanded in August as the purchasing managers index (PMI) registered 58.8%, an increase of 2.5% from the July reading of 56.3%. This indicates growth in manufacturing for the 12th consecutive month and is the highest reading since April 2011, when the index registered 59.1%.

The past relationship between the PMI and the overall economy indicates that the average PMI for January through August (56.7%) corresponds to a 4.2% increase in real GDP on an annualized basis. 

U.S. Added 156,000 Jobs in August

Total nonfarm payroll employment increased by 156,000 in August, and the unemployment rate went up 0.1% to 4.4%, the U.S. Department of Labor reported today. Hurricane Harvey had no discernable effect on the employment and unemployment data for August. Household survey data collection was completed before the storm.

Manufacturing employment rose by 36,000 in August. Job gains occurred in motor vehicles and parts (+14,000), fabricated metal products (+5,000), and computer and electronic products (+4,000). Manufacturing has added 155,000 jobs since a recent employment low in November 2016. 

Second Quarter GDP Revised Up to 3.0% Growth

Real GDP increased at an annual rate of 3.0% in the second quarter of 2017, according to the newest Commerce Department estimate. In the first quarter, real GDP increased 1.2%. In the last estimate, second quarter GDP was estimated at 2.6%.

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

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