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Last updateTue, 17 Oct 2017 3pm

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Texas Manufacturing Activity Strengthens, Outlooks Improve

Texas factory activity increased again in July, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey. The production index—a key measure of state manufacturing conditions—rose 11 points to 22.8, indicating output grew at a faster pace than in June.

Other measures of current manufacturing activity also indicated a pickup in growth. The new orders and the growth rate of orders indexes rose several points each, coming in at 16.1 and 12.2, respectively. The capacity utilization index moved up to 18.1, and the shipments index increased three points to 11.6.

Perceptions of broader business conditions improved again in July, with a sharp pickup in outlooks. The general business activity index edged up to 16.8. The company outlook index jumped 15 points to 25.9, reaching its highest level since 2010. 


Second Quarter GDP Up 2.6% in the U.S.

Gross domestic product (GDP) increased at an annual rate of 2.6% in the second quarter of 2017, according to the U.S. Department of Commerce. In the first quarter, the GDP was revised downward to an increase of 1.2%.

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

Durable Goods Orders Rose 6.5% in June

New orders for manufactured durable goods in June increased $14.9B or 6.5% to $245.6B, the U.S. Department of Commerce announced this week. This increase, up following two consecutive monthly decreases, followed a 0.1% May decrease. Excluding transportation, new orders increased 0.2%. Excluding defense, new orders increased 6.7%.

Shipments of manufactured durable goods in June, down three of the last four months, decreased $0.1B or virtually unchanged to $236.0B. This followed a 1.2% May increase. 

U.S. Consumer Confidence Rebounds in July

The Conference Board Consumer Confidence Index, which had declined marginally in June (a downward revision), improved in July. The Index now stands at 121.1, up from 117.3 in June. The Present Situation Index increased from 143.9 to 147.8, while the Expectations Index rose from 99.6 last month to 103.3.

“Consumer confidence increased in July following a marginal decline in June,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of current conditions remained at a 16-year high (July 2001, 151.3) and their expectations for the short-term outlook improved somewhat after cooling last month. Overall, consumers foresee the current economic expansion continuing well into the second half of this year.” 

IHS Market PMI Index Reached Four-Month High in July

July data revealed a further acceleration in business activity growth across the U.S. private sector. At 54.2, up from 53.9 in June, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index signaled the strongest rate of expansion since January.

The pickup in business activity growth was driven by a steeper increase in manufacturing production in July (‘flash’ output index at 54.3, up from 52.6 in June). Meanwhile, service providers indicated that activity growth was unchanged from June’s five-month peak (‘flash’ business activity index at 54.2 in July). 

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