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U.S. Factory Orders Rose By 1.3% in November

New orders for manufactured goods in November, up five of the last six months, increased $6.5 billion or 1.3% to $488.1 billion, the U.S. Department of Commerce reported. This followed a 0.4% October increase. Shipments, up eleven of the last twelve months, increased $5.7 billion or 1.2% to $491.2 billion. This followed a 0.8% October increase.

New orders for manufactured durable goods in November, up three of the last four months, increased $3.0 billion or 1.3% to $241.4 billion. This followed a 0.4% October decrease. 


U.S. Adds Fewer Than Expected Jobs in December

Total nonfarm payroll employment increased by 148,000 in December, and the unemployment rate was unchanged at 4.1%, the U.S. Department of Labor reported today. Employment gains occurred in health care, construction and manufacturing. In 2017, payroll employment growth totaled 2.1 million, compared with a gain of 2.2 million in 2016.

In December, manufacturing employment rose by 25,000, largely reflecting a gain in durable goods industries (+21,000). Manufacturing added 196,000 jobs in 2017, following a loss of 16,000 in 2016. 

ISM: U.S. Manufacturing Sector Strongest Since 2004

Manufacturing expanded in December as the PMI registered 59.7%, an increase of 1.5% from the November reading of 58.2%. “This indicates growth in manufacturing for the 16th consecutive month, led by strong expansion in new orders and production with hiring growing at a slower rate and supplier deliveries continuing to struggle,” says ISM Manufacturing Business Survey Committee Chair Tim Fiore.

“The past relationship between the PMI and the overall economy indicates that the average PMI for January through December (57.6%) corresponds to a 4.5% increase in real GDP on an annualized basis.” 

IHS Markit Manufacturing PMI Rose in December

The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index (PMI) registered 55.1 in December, up from 53.9 in November. The latest index reading was the highest since March 2015 and signaled a solid improvement in the health of the sector. December data also rounded off the strongest quarterly performance since the start of 2015. Output at manufacturers expanded at a steep pace in December, with growth reaching an eleven-month high. Panelists attributed greater production to more favorable demand conditions and increased new order volumes.

Backlogs meanwhile increased at the quickest rate since October 2015 to indicate ongoing capacity pressures. Supply chain delays and increased global demand for inputs pushed costs up further, with the rate of cost inflation remaining sharp overall. Charge inflation, however, softened. Business confidence remained robust, driven by more favorable demand conditions. 

Mid-America Business Conditions Up in December

The December Creighton University Mid-America Business Conditions Index, an economic indicator for the nine-state region stretching from Arkansas to North Dakota, rose for the month, pointing to healthy growth for the next three to six months. The index, which ranges between 0 and 100, climbed to 59.0 from November’s 57.2. This is the 13th straight month that the index has remained above growth neutral, continuing to point to positive growth for the region over the next three to six months.

This month supply managers were asked to identify the greatest economic challenge facing their companies’ profitability over the next five years. Approximately 44.7% named increasing foreign competition as the biggest threat while more than one in five, or 21.3% indicated the shortage of qualified workers would be the greatest challenge to their businesses. 

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