12162017Sat
Last updateFri, 15 Dec 2017 3pm

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Global Manufacturing Growth Remains Solid in September

The global manufacturing economy continued to expand at a solid and steady pace during September. The J.P.Morgan Global Manufacturing PMI posted 53.2, unchanged from August’s 75-month high. Manufacturing production rose at the quickest pace in six months, underpinned by further increases in both total new orders and international trade volumes. The continued upturn in new order inflows exerted further pressure on capacity, leading to one of the steepest increases in backlogs of work over the past three-and-a-half years. This in turn encouraged manufacturers to raise employment to the greatest extent since May 2011. 


IHS Markit Signals Further Improvement in Manufacturing Conditions

The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index (PMI) registered 53.1 in September, up slightly on the flash reading of 53.0 and rising from 52.8 in August. The upturn signaled a slight pick-up in growth momentum and a strong improvement in overall operating conditions across the sector.

September survey data signaled a further improvement in operating conditions across the U.S. manufacturing sector. The overall upturn was supported by further growth in output and new orders. Strong client demand was a key factor behind the fastest rise in staffing levels so far this year. Business confidence also remained strong, despite slipping since August. On the price front, cost pressures intensified, with input prices increasing at the quickest pace since December 2012. Output charges meanwhile rose at the steepest rate for five months. 

IMF: Weak Productivity Growth Holding Back U.S. Economy

The global upswing in economic activity is strengthening, with global growth projected to rise to 3.6% in 2017 and 3.7% in 2018. Broad-based upward revisions in the euro area, Japan, emerging Asia, emerging Europe and Russia more than offset downward revisions for the U.S. and UK. But the recovery is not complete: while the baseline outlook is strengthening, growth remains weak in many countries, and inflation is below target in most advanced economies. Commodity exporters, especially of fuel, are particularly hard hit as their adjustment to a sharp stepdown in foreign earnings continues. 

Dodge Momentum Index Declines 8.4%

The Dodge Momentum Index fell in September, moving 8.4% lower to 116.4 from the revised August reading of 127.1. The index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. Both components of the index declined in September. The institutional building component fell 11.5% from August, while the commercial building component fell 6.1%. While the overall Momentum Index has lost ground for four consecutive months, this should not be seen, in and of itself, as a predictor of a turn in building markets. Economic growth remains solid, and building market fundamentals are supportive of further growth in construction activity. 

U.S. Lost 33,000 Jobs in September

The U.S. lost 33,000 jobs in September, after adding an average of 172,000 jobs per month over the prior 12 months. The unemployment rate dropped 0.2% to 4.2%. A steep employment decline in food services and drinking places and below-trend growth in some other industries likely reflected the impact of Hurricanes Irma and Harvey. Employment rose in health care and in transportation and warehousing.

Manufacturing employment declined by 1,000 in September. From a recent employment trough in November 2016 through August of this year, the industry had added an average of 14,000 jobs per month. 

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