Real gross domestic product (GDP) -- the value of all goods and services produced within the United States -- increased at an annual rate of 0.9 percent in the first quarter of 2008, Commerce Department reported today. The new reading on gross domestic product was an improvement from the government’s initial growth estimate of 0.6 percent for the January-to-March quarter. For the fourth quarter of 2007, real GDP increased 0.6 percent.
One of the bright spots keeping the economy afloat in the first quarter was export growth. Exports grew at a 2.8 percent pace. Although that was not nearly as much as first estimated, exports still were a force for GDP growth. The falling value of the U.S. dollar has made U.S. exports less expensive to foreign buyers.
In April 2008, average hourly earnings in manufacturing were $17.57, down 0.2 percent from March’s $17.61 (revised), and up 2.2 percent from $17.20 in April 2007.
The average hourly compensation of all manufacturing workers rose 6.7 Percent (from previous quarter, at annual rate) in the first quarter of 2008, reflecting increases in hourly compensation of 6.6 percent in durable goods industries and 6.5 percent in the nondurable goods sector. For the first quarter of 2008, real hourly compensation, which takes into account of changes in consumer prices, grew 2.3 percent in total manufacturing workers
after declining 0.6 percent in one quarter earlier. Manufacturing real hourly compensation rose 2.2 percent in durable goods industries while increased 2.1 percent in non-durables.
In 2007, hourly compensation of all manufacturing workers rose 5.4 percent, compared to a 2.8 percent increase in 2006. Hourly compensation increased 5.6 percent in durable manufacturing and grew 5.1 percent in nondurable goods industries.
Real hourly compensation in total manufacturing sector increased 2.5 percent in 2007 after decreasing 0.5 percent in 2006.
Manufacturing profits in the fourth quarter of 2007 were $280.3 billion, down 5.6 percent or $16.5 billion (at an annual rate) from $296.8 billion in the third quarter.
Manufacturing profits in the fourth quarter of 2007 were up $0.1 billion compared with the fourth quarter profits of 2006. Manufacturing profits in 2007 were up $12.3 billion above manufacturing profits in 2006.
First quarter 2008 profit estimates for all non-financial industries (manufacturing being a subcategory) were down 15 percent from the fourth quarter of 2007 to $827.5 billion, and below 16 percent from the first quarter of 2007.
In April 2008, manufacturing employment fell 46,000 to 13.6 million from March’s (revised) manufacturing employment levels. The decline was reported in both durable and non-durable goods industries. Within durable goods, employment continued to decline in industries related to construction, such as Wood Products (-2,100), Furniture and Related Products (-4,100), and Fabricated Metal Products (-11,300). In addition, job losses were reported in Transportation Equipment (-19,000), Machinery (-2,300), Computer and Electronic Products (-1,900) and Miscellaneous Manufacturing (-2,400).
In the non-durable goods sector, job losses were registered in Textile Mills (-2,400), Apparel (-1,300), Plastics and Rubber Products (-1,900), Chemicals (-500), and Petroleum and Coal Products (-500), among others. However, job gains were reported in Food Manufacturing (1,700).
Since April 2007, manufacturing employment has declined by 326,000. Nonetheless, manufacturing employs 13.6 million workers and represents 9.9 percent of total non-farm employment.
In April 2008, manufacturing output declined 0.8 percent after edging up by 0.1 percent in March. Half of this loss was attributable to a drop of 8.2 percent in the production of motor vehicles and parts.
The production of durable goods fell 1.4 percent after having been unchanged in March, as revised. In addition to the motor vehicles and parts, the durable manufacturing industries that registered decreases in output of more than 1 percent in April included nonmetallic mineral products (-2.4%), fabricated metal products (-1.5%), and machinery (-1.7%). In contrast, the output of computer and electronic products moved up (1.1%), more than 1 percent increase for the third consecutive month.
The index for nondurable manufacturing edged down 0.1 percent; sizable reductions occurred in the indexes for textile and product mills (-1.8%), printing and support (-1.2%), and plastics and rubber products (-0.8%). The output of petroleum and coal products rose (0.8%). The production of non-NAICS manufacturing (logging and publishing) fell 1.8 percent.
In April 2008, manufacturing industries (NAICS based) operated at 77.6 percent of capacity, 1.9 percentage points below their 1972-2007 average of 79.5 percent and 0.7 percentage points less than their revised capacity utilization in March 2008.
In durable manufacturing, capacity utilization decreased 1.2 percentage points in April from March (revised) to 75.4 percent. Capacity utilization edged down in Motor vehicles and parts (-5.5%); Nonmetallic mineral products (-1.9 percent); Fabricated metals products (-1.2 percent); Machinery (-1.3 percent); and Electrical equipment, appliances and components (-0.8%) among others. Nonetheless, capacity utilization increased in Computer and electronic products (0.1 percent); and Aerospace and miscellaneous transportation equipment (0.1 percent).
In April 2008, capacity utilization in non-durable manufacturing fell 0.1 percentage points from March 2008 (revised) to 80.1 percent. Decreased capacity utilization was reported in Food, beverage and tobacco products (-0.1%); Textile and product mills (-1.0%); Paper (-0.3%); Printing and support (-1.0%); Plastics and rubber products (-0.8%); and Chemicals (-0.1%). These losses outweighed rises in Apparel and leather (0.3%) and Petroleum and coal products (0.7%).
Manufacturing productivity rose at a seasonally adjusted annual rate of 4.1 percent in the first quarter of 2008, as output declined 0.3 percent and hours of all workers dropped 4.2 percent. The hourly compensation of all manufacturing workers increased 6.7 percent during the first quarter of 2008 and real hourly compensation rose 2.3 percent (seasonally adjusted annual rates). Because hourly compensation of manufacturing workers rose more rapidly than productivity, unit labor costs increased in the first quarter, by 2.5 percent. Unit labor costs increased 4.1 percent in durable goods manufacturing and fell 0.4 percent in nondurable goods manufacturing.
In durable goods industries, productivity increased at a seasonally adjusted annual rate of 2.3 percent as both output and hours decreased, 0.5 percent and 2.8 percent, respectively. In nondurable goods industries, output per hour rose 7.0 percent, reflecting decreases of 0.1 percent in output and 6.6 percent in hours. By comparison, productivity in the fourth quarter of 2007 increased 4.2 percent in total manufacturing, 6.6 percent in durable goods industries, and 0.5 percent in nondurable goods industries, as revised.
In 2007, manufacturing productivity grew at annual rate of 3.4 percent, reflecting a rise in output of 1.6 percent and a decline in hours of 1.7 percent. Labor productivity increased 4.5 percent in durable goods manufacturing during 2007, as output rose 2.3 percent and hours fell 2.0 percent. Productivity in nondurable goods manufacturing increased 2.1 percent in 2007, reflecting a 0.9 percent increase in output and a 1.2 percent drop in hours.
Strong productivity growth has resulted in the decline in manufacturing employment.
Year to date March 2008, U.S. manufactured goods exports accounted for 60.9 percent of all U.S. exports of goods and services, compared with 62.7 percent a year ago. During that same period, manufactured goods exports were 14.3 percent above year ago levels, while imports were up 4.6 percent. The trade deficit in manufactures improved to $431.8 billion (annual rate) for 2008, year to date, down from $501.6 billion a year earlier.
Shipments of manufactured durable goods in April 2008 increased $2.5 billion or 1.2 percent to $212.2 billion. This followed two consecutive monthly decreases, including a 0.9 percent March decrease.
Computers and electronic products had the largest increase, up $1.4 billion or 4.3 percent to $32.8 billion. The next largest percentage increases were in Primary metals (2.4 percent), Fabricated metal products (1.2 percent), Transportation equipment (0.8 percent), and Electrical equipment, appliances and components (0.5 percent). However, shipments decreased in Machinery (-1.3 percent).
In April 2008, the Producer Price Index (PPI) for finished goods, except foods and energy, moved up 0.4 percent following a 0.2 percent increase in the previous month. The index for finished energy goods fell 0.2 percent in April after rising 2.9 percent in March.
Not all prices for finished goods, except foods and energy increased. Prices for communication and related equipment declined 0.4 percent after rising by the same rate in the prior month.
Prices for residential natural gas advanced 5.4 percent in April, compared with a 4.2 percent gain a month earlier. Prices for liquefied petroleum gas turned up 3.5 percent in April, following a 4.2 percent rise in March.
Finally, the index for finished consumer goods, except foods and energy, increased 0.4 percent in April, after climbing 0.3 percent in the previous month.
In April 2008, the ISM index of manufacturing registered 48.6 percent, unchanged from March’s seasonally adjusted reading. An index above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
Economic activity in the manufacturing sector failed to grow in April as the ISM index fell below 50 percent for the third consecutive month, while the overall economy grew for the 78th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The changes in the components of the ISM index in April were: New Orders unchanged, Production up 0.4%, Employment down 3.8%, Supplier Deliveries up 0.4%, and Inventories up 3.2%.
Prepared by
Office of Competition and Economic Analysis
Manufacturing and Services
International Trade Administration
U.S. Department of Commerce
(202) 482-3699
Links
to Web sites outside the U.S. federal government or the use
of trade, firm, or corporation names within the International
Trade Administration Web sites are for the convenience of
the user. Such use does not constitute an official endorsement
or approval by the U.S. Commerce Department of any private
sector Web site, product, or service.
Indicates
a PDF file. If you can't open these, download a free 