U.S. Leading Economic Indicators Gain 0.4%, More Than Forecast:
The index of leading U.S. economic indicators rose more than expected in January, led by a jump in money supply though continued deterioration elsewhere in the economy.
The Conference Board’s gauge rose 0.4 percent, the most since December 2006, after a revised 0.2 percent increase in December, the New York-based group said today. The index is designed to show the likely direction of the economy over the next three to six months. Economists forecast the index would gain 0.1 percent.
Increased lending and purchases of securities by the Federal Reserve have boosted the real money supply, the biggest component of the leading index. President Barack Obama this week signed into law a $787 billion economic stimulus package and unveiled a plan to help Americans keep their homes by cutting mortgage payments and encouraging loan revisions.
In January 2009, average hourly earnings in manufacturing were $18.01, up 0.3 percent from December 2008’s $17.96 (revised), and up 2.8 percent from $17.52 in January 2008.
(BLS/DOL Employment data from “The Employment Situation: January 2009, USDL 09-0117,” released February 6, 2009; next release is March 6, 2009)
http://www.bls.gov/news.release/pdf/empsit.pdf
Manufacturing Wage Rates (Quarterly, Yearly)
The average hourly compensation of all manufacturing workers rose 9.8 percent during the fourth quarter of 2008 (from the previous quarter, at an annual rate), reflecting increases in hourly compensation of 10.1 percent in durable goods subsector and 9.6 percent gain in nondurable goods manufacturing.
When the decrease in consumer prices was taken into account, real hourly compensation in total manufacturing workers advanced 20.9 percent in the fourth quarter, which was the largest increase in the series.
In 2008, hourly compensation of all manufacturing workers grew 3.9 percent, compared to a 3.5 percent increase in 2007. Real hourly compensation in the total manufacturing sector rose 0.1 percent in 2008 after increasing by 0.7 percent in 2007.
(BLS/DOL Productivity data from “Productivity and Costs, USDL 09-0116 February 5, 2009,” released February 5, 2009; next release is March 5, 2009)
http://www.bls.gov/news.release/pdf/prod2.pdf
In the third quarter of 2008, manufacturing profits rose 26.8 percent, or $57.7 billion (at an annual rate), to $272.6 billion from $214.9 billion in the second quarter. Compared with third quarter profits of 2007, manufacturing profits were down $34 billion in the third quarter of 2008. Manufacturing profits in 2007 were $12.3 billion above manufacturing profits in 2006.
Third quarter 2008 profits estimates for all non-financial industries (manufacturing being a subcategory) advanced 9.1 percent from the second quarter of 2008 to $915.6 billion.
In January 2009, manufacturing employment fell by 207,000 to 12.7 million from December’s (revised) manufacturing employment levels, the largest over-the-month decline since October 1982.
In January, durable goods manufacturing lost 157,000 jobs, with notable decreases in Fabricated metal products (-36,700), Motor vehicles and parts (-31,300), Machinery (-21,800), Furniture and related products (-11,400), Primary metals (-8,500), Wood products (-13,600), and Computer and electronic products (-8,800).
In the nondurable goods component, the job losses occurred in Plastics and rubber products (-14,500), Food manufacturing (-5,700), Textile mills (-3,100), Printing and related support activities (-7,700), and Paper and paper products (-6,000), among others.
The manufacturing employment of 12.7 million workers represents 9.4 percent of total non-farm employment.
(BLS/DOL Employment data from “The Employment Situation: January 2009, USDL 09-0117,” released February 6, 2009; next release is March 6, 2009)
http://www.bls.gov/news.release/pdf/empsit.pdf
In January 2009, manufacturing output fell 2.5 percent and was 12.9 percent below its year-earlier level
The index for durable goods industries decreased 4.8 percent in January with declines widespread among its components. The output of motor vehicles and parts decreased at a monthly rate of 23.4 percent in January, after having contracted at an annual rate of more than 37.3 percent in the fourth quarter. All of the remaining major indexes fell sharply in January with the exception of miscellaneous manufacturing, which moved up 0.3 percent.
The production of nondurable goods fell 0.5 percent in January after a loss of 2.9 percent in December. The output of food, beverage, and tobacco products rose 0.6 percent, but declines were recorded in all the other major nondurable goods industries.
Industries with notable declines included Plastics and rubber products (-3.5 percent), Apparel and leather (-3.1 percent), Printing and support (-3.4 percent), and Textile and product mills (-1.2 percent).
The index for other manufacturing industries (non-NAICS), which consist of publishing and logging, decreased 1.5 percent in January.
In January 2009, manufacturing industries (NAICS based) operated at 67.9 percent of capacity, 11.5 percentage points below their 1972-2008 average of 79.4 percent and 1.7 percentage points lower than their revised capacity utilization in December 2008.
In durable manufacturing, capacity utilization decreased 3.1 percentage points in January from December (revised) to 62.4 percent. Capacity utilization declined in Motor vehicles and parts (-12.0 percent); Primary metals (-1.1 percent); Wood products (-2.0 percent); Nonmetallic mineral products (-1.8 percent); Fabricated metal products (-2.9 percent); Machinery (-2.7 percent); Aerospace and miscellaneous transportation equipment (-1.8 percent); and Computer and electronic products (-1.3 percent), among others.
Capacity utilization in non-durable manufacturing in January moved down 0.3 percentage points from December 2008 (revised) to 73.8 percent. Decreased capacity utilization was registered in Plastics and rubber products (-2.4 percent); Apparel and leather (-1.8 percent); Printing and support (-2.1 percent), Paper (-0.6 percent); and Textile and product mills (-0.5 percent). Increased capacity utilization was registered in Food, beverage, and tobacco products (0.5 percent).
Manufacturing productivity decreased 3.0 percent (seasonally adjusted annual rate) in the fourth quarter of 2008, as output dropped 16.7 percent and hours of all persons declined 14.1 percent. The decreases in hours and output were the largest for these series, since the second quarter of 1987. Manufacturing productivity had grown at a 3.7 percent average annual rate from 2000 to 2007 and 1.3 percent increase in 2008.
In the durable goods manufacturing sector, productivity dropped 13.4 percent in the fourth quarter of 2008, as output fell 26.1 percent and hours declined 14.7 percent. These were the largest decreases in productivity, output, and hours for the entire series dating back to second-quarter 1987.
In the nondurable goods sector, productivity rose 7.6 percent in the fourth quarter as hours fell faster than output; output declined 6.5 percent and hours dropped 13.1 percent.
The trend of strong productivity growth has resulted in the decline in manufacturing employment.
(BLS/DOL Productivity data from “Productivity and Costs, USDL 09-0116 February 5, 2009,” released February 5, 2009; next release is March 5, 2009)
http://www.bls.gov/news.release/pdf/prod2.pdf
In 2008, U.S. manufactured goods exports accounted for 60.9 percent of all U.S. exports of goods and services, compared with 62.1 percent a year ago. Manufactured goods exports rose 9.8 percent in 2008, while imports were up 1.7 percent. The trade deficit in manufactures was $456.1 billion, down from $528.8 billion in 2007.
In December 2008, shipments of manufactured durable goods decreased $1.4 billion or 0.7 percent to $191.3 billion, down five consecutive months. This followed a 4.2 percent November decline.
Primary metals had the largest decrease, down $1.3 billion or 7.4 percent, to $16.7 billion. Shipments also decreased in Fabricated metal products (-3.3 percent); and Computer and electronic products (-0.1 percent). Shipments increased in Machinery (2.5 percent); Electrical equipment, appliances and components (1.5 percent); and Transportation equipment (1.3 percent).
In January 2009, the Producer Price Index (PPI) for finished goods, except foods and energy, accelerated 0.4 percent, after increasing by 0.2 percent in December.
The index for finished energy goods turned up 3.7 percent in January after falling 9.1 percent a month earlier. The index for gasoline increased 15.0 percent after dropping 26.2 percent in the preceding month. Prices for liquefied petroleum gas, home heating oil, and kerosene also turned up after declining in December. The indexes for diesel fuel and residential natural gas fell less than in the prior month.
By contrast, prices for residential electric power increased 0.3 percent in January compared with a 0.5 percent gain in December, partially offsetting the upturn in finished energy goods prices.
In January 2009, the ISM index (PMI) of manufacturing registered 35.6 percent, 2.7 percentage points higher than the seasonally adjusted 32.9 percent reported in December.
While this is a significant month-over-month improvement, it is still a sign of continuing weakness in the sector. An index above 50 percent indicates that the manufacturing economy is generally expanding; an index below 50 percent indicates that it is generally contracting.
Economic activity in the manufacturing sector failed to grow in January for the twelfth consecutive month, and the overall economy contracted for the fourth consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
“January marked 12 months of contraction in the manufacturing sector. However, the rate of decline as measured by the PMI was slower than experienced in December. The January New Orders Index is at 33.2 percent, up from the seasonally adjusted 23.1 percent recorded in December,” says Norbert J. Ore, C.P.M., chair of the manufacturing business survey committee.
The changes in the components of the PMI in January were: New Orders up 10.1 percent, Production up 5.8 percent, Employment unchanged, Supplier Deliveries down 0.4 percent, and Inventories down 2.1 percent.
Prepared by
Office of Competition and Economic Analysis
Manufacturing and Services
International Trade Administration
U.S. Department of Commerce
(202) 482-3699
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