High interest rates and inflation continue to drag down the US manufacturing sector, however we have seen some improvement. The Chicago Business Barometer or Chicago PMI rose to 48.7 in August of 2023 from 42.8 in July, and well above market forecasts of 44.1. The reading marked the 13th consecutive month of contraction in business activity in the Chicago region but the smallest in the current sequence that began in September 2022. Below the 50 threshold indicates economic contraction. The … Continue reading “Chicago Economic Activity Improves in August but Still in Contraction ISM PMI Shows”
German Industrial Base Still Struggling, April Factory Orders -0.4% vs +3.0% m/m Expected
Germany’s industrial powerhouse has still not recovered from the supply line crisis and then the difficulties of being so reliant on Russia for energy and the shocks that came with that. German industrial orders unexpectedly dropped by 0.4% m/m in April 2023, missing market estimates of a 3.0% rise and following an upwardly revised 10.9% fall in March. This was the second straight month of decline in industrial orders, dragged down a fall in large-scale orders. If you take out … Continue reading “German Industrial Base Still Struggling, April Factory Orders -0.4% vs +3.0% m/m Expected”
US Durable Goods Report Much Stronger Business Spending in April
The US economy appears resolute in the face of onslaught of rising rates, pessimism and inflation hitting the American manufacturing sector. Durable goods orders showed an unexpected increase in headline orders while the March increase was revised even higher. More significantly that nondefense capital goods orders excluding aircraft, a proxy for business spending increased 1.4% month-over-month. Durable goods orders rose 1.1% month-over-month in April, much stronger than (consensus -1.0% and following an upwardly revised 3.3% increase (from 3.2%) in March. … Continue reading “US Durable Goods Report Much Stronger Business Spending in April”
US Two Speed Economy, Services Activity Rapid Expansion While Manufacturing Contracts – S&P
The S&P Global Flash PMI report PMI report for May 2023 underscored the strength in the US services sector versus a struggling manufacturing sector. Business activity for the services sector comprises the largest component of U.S. economic activity. The report shows the overall strength of the US economy despite the headwinds. The composite PMI index rose to 54.5 versus 53.5 last month, Services PMI rose 55.1 versus the 52.6 estimate and Manufacturing PMI flash floundered at 48.5 versus 50 expected. … Continue reading “US Two Speed Economy, Services Activity Rapid Expansion While Manufacturing Contracts – S&P”
US Manufacturing Sector Continues to Shrink, ISM PMI Sub-50.0% for Sixth Consecutive Month
The ISM Manufacturing Index edged higher to 47.1 in April of 2023 from 46.3 in March, as it trys to recover from the lowest since May 2020. The report reflects a general contraction in manufacturing activity and marks the sixth straight month with a sub-50.0% reading. The result was consistent with the regional Chicago PMI’s seventh consecutive month of contraction in business activity in the Chicago region. Clearly the cumulative effect of rate hikes around the globe is adversely impacting … Continue reading “US Manufacturing Sector Continues to Shrink, ISM PMI Sub-50.0% for Sixth Consecutive Month”
U.S. Manufacturing Contraction Deepens, ISM PMI Approaches Pandemic Levels in March
The March ISM Manufacturing Index decreased to 46.3% (consensus 47.5%) from 47.7% in February, the lowest reading since May 2020. The index contracted for the fifth straight month under 50%. Manufacturing activity at 46.3% the ISM corresponds to a change of -0.9% in real GDP on an annualized basis. The result was consistent with the regional Chicago PMI’s seventh consecutive month of contraction in business activity in the Chicago region. Clearly the cumulative effect of rate hikes around the globe … Continue reading “U.S. Manufacturing Contraction Deepens, ISM PMI Approaches Pandemic Levels in March”
Chicago Economic Activity Contracts for Seventh Straight Month in March
The Chicago Business Barometer or Chicago PMI eked out a gain to 43.8 in March of 2023 from 43.6 in January. High interest rates and inflation continue to drag down the US manufacturing sector. Figures came in higher than market forecasts of consensus 42.5, pointing to some balancing of economic activity in the Chicago region, which extended for a seventh straight month below the 50 threshold indicates economic contraction. The Chicago PMI is the last of the regional manufacturing indices … Continue reading “Chicago Economic Activity Contracts for Seventh Straight Month in March”
February ISM Manufacturing PMI 47.7, Fourth Straight Month Sub-50.0%
The ISM Manufacturing Index edged higher to 47.7 in February of 2023 from 47.4 in January, which was the lowest since May 2020. The report reflects a general contraction in manufacturing activity and marks the fourth straight month with a sub-50.0% reading. The result was consistent with the regional Chicago PMI’s sixth consecutive month of contraction in business activity in the Chicago region. Clearly the cumulative effect of rate hikes around the globe is adversely impacting demand, evidenced by the … Continue reading “February ISM Manufacturing PMI 47.7, Fourth Straight Month Sub-50.0%”
Chicago Economic Activity Contracts Further ISM PMI Shows in February
High interest rates and inflation continue to drag down the US manufacturing sector. The Chicago Business Barometer or Chicago PMI fell for a second consecutive month to 43.6 in February of 2023 from 44.3 in January. Figures came in lower than market forecasts of 45, pointing to another contraction in economic activity in the Chicago region, which extended for a sixth straight month. Below the 50 threshold indicates economic contraction. The Chicago PMI is the last of the regional manufacturing … Continue reading “Chicago Economic Activity Contracts Further ISM PMI Shows in February”
Improved American Productivity Helped Tame Unit Labor Costs
In the fourth quarter U.S. productivity increased 3.0% (ahead of consensus 2.5%), as output increased 3.5% and hours worked increased 0.5%. This followed an upwardly revised 1.4% increase (from 0.8%) in the third quarter. Productivity increasing is one way to lower inflation and a way to increase profitability, and lower unit labor costs. Unit labor costs rose 1.1% (lower than the consensus 1.5%) following a downwardly revised 2.0% (from 2.4%) in the third quarter. The Fed is keeping a sharp eye on … Continue reading “Improved American Productivity Helped Tame Unit Labor Costs”