Exxon Mobil Posts Biggest US Quarterly profit Ever:
On October 30, 2008, Exxon Mobil Corporation, the world’s largest publicly traded oil company, reported income that smashed its own record for the biggest profit from operations by a U.S. corporation, earning $14.83 billion in the third quarter. Revenue rose 35 percent to $137.7 billion. Analysts expected the company to earn $2.39 per share in the latest quarter on revenue of $131.4 billion. The previous record for U.S. corporate profit was set in the last quarter, when Exxon Mobil earned $11.68 billion.
“Our integrated business portfolio, strong operational performance and financial discipline continued to allow us to capture the benefits of the commodity price environment,” Exxon Mobil investor relations chief, David Rosenthal said on a call with analysts. “Despite recent volatility in the financial, commodity and credit markets, the fundamentals of Exxon Mobil’s business remain strong.”
The hourly compensation of all manufacturing workers increased 3.9 percent during the second quarter of 2008 (from the previous quarter, at an annual rate), reflecting increases in hourly compensation of 4.1 percent in durable goods manufacturing and 3.3 percent in nondurable goods sector.
For the second quarter of 2008, real hourly compensation, which takes into account changes in consumer prices, fell 1.1 percent in total manufacturing workers; fell 0.8 percent in durable goods industries, and declined 1.6 percent in non-durables.
In 2007, hourly compensation of all manufacturing workers grew 3.5 percent, compared to a 4.1 percent increase in 2006. Real hourly compensation in the total manufacturing sector rose 0.7 percent in 2007 after increasing by 0.8 percent in 2006.
In the second quarter of 2008, manufacturing profits decreased 10.6 percent or $25.6 billion (at an annual rate) to $214.9 billion, from $240.5 billion in the first quarter. Compared with second quarter profits of 2007, manufacturing profits were down $135.9 billion in the second quarter of 2008. Manufacturing profits in 2007 were $12.3 billion above manufacturing profits in 2006.
Second quarter 2008 profits for all non-financial industries (manufacturing being a subcategory) increased 1.1 percent from the first quarter of 2008 to $839.3 billion, but fell 21.1 percent from the second quarter of 2007.
In September 2008, manufacturing employment decreased 51,000 to 13.4 million from August’s (revised) manufacturing employment levels, bringing the decline in factory jobs to 442,000 over the past 12 months.
Among durable goods, the job losses continued in motor vehicles and parts (-18,200); this industry has shed 140,000 jobs over the past 12 months. In September, employment also fell in industries related to construction, such as Fabricated metals (-7,300), Wood products (-4,500), and Furniture and related products (-5,300). However, employment increased in Primary metals (1,400), and Miscellaneous manufacturing (400).
In non-durable goods manufacturing, job losses registered in paper products (-3,000), plastics and rubber products (-4,300), Textile Mills (-1,300), Apparel (-2,400), Printing and support activities (-2,800), and Chemicals (-2,900), among others. Food manufacturing added 3,400 jobs over the month.
The manufacturing employment of 13.4 million workers represents 9.7 percent of total non-farm employment.
Manufacturing output decreased 2.6 percent in September from its level in August, reflecting a 2.5 percent drop in durable and 2.9 percent decline in non-durable manufacturing.
The production of durable goods industries fell 2.5 percent, with declines widespread among its components, including Aerospace and miscellaneous transportation equipment (-16.6 percent); Nonmetallic mineral products (-2.0 percent); Machinery (-3.3 percent); Wood products (-3.3 percent); Electrical equipment, appliances, and components (-1.6 percent); and Miscellaneous manufacturing (-1.7 percent), among others. The only durable goods industry to have registered a gain in September was Motor vehicles and parts (1.9 percent).
The production of nondurable goods decreased 2.9 percent, with widespread weakness.
The output of petroleum and coal products plunged 9.2 percent because of the effects of the storms Gustav and Ike on refinery activity. Declines were also recorded in the indexes for Food, beverage, and tobacco products (-0.2 percent); Textile and product mills (-1.0 percent); Paper and products (-1.4 percent); Printing and support (-1.5 percent); Chemicals (-3.0 percent); and Plastics and rubber products (-2.0 percent). The index for Apparel and leather registered a gain of 0.3 percent.
The index for other manufacturing industries (non-NAICS), which consist of publishing and logging, edged down 0.2 percent in September after an increase of 0.5 percent in August.
In September 2008, manufacturing industries (NAICS based) operated at 74.5 percent of capacity, 5.0 percentage points below their 1972-2007 average of 79.5 percent and 2.1 percentage points less than their revised capacity utilization in August 2008.
In durable manufacturing, capacity utilization decreased 2.0 percentage points in September from August (revised) to 72.3 percent. Capacity utilization declined in Aerospace and miscellaneous transportation equipment (-13.1 percent); Wood products (-2.1 percent); Furniture and related products (-1.0 percent); Machinery (-2.5 percent); Electrical equipment, appliances, and components (-1.4 percent); Nonmetallic mineral products (-1.6 percent); and Miscellaneous manufacturing (-1.3 percent), among others. Capacity utilization increased in Motor vehicles and parts (1.1 percent).
Capacity utilization in non-durable manufacturing in September fell 2.3 percentage points from August 2008 (revised) to 77.0 percent. Decreased capacity utilization was registered in Petroleum and coal products (-8.3 percent); Paper and products (-1.1 percent); Printing and support (-1.2 percent); Chemical (-2.3 percent); Textile and product mills (-0.5 percent); and Plastics and rubber products (-1.7 percent). These losses outweighed a small gain in capacity utilization in Apparel and leather (0.4 percent).
Compared with the first quarter of 2008, manufacturing productivity decreased 2.2 percent (seasonally adjusted annual rate) in the second quarter of 2008, as output fell 3.7 percent and hours of all workers decreased 1.5 percent. This was the largest quarterly decline in manufacturing productivity since a 2.5 percent decrease in the second quarter of 1989.
In durable goods industries, productivity fell at a seasonally adjusted annual rate of 4.5 percent in the second quarter of 2008 from the previous quarter, as output and hours decreased by 5.9 percent and 1.5 percent, respectively. In nondurable goods, productivity edged up 0.2 percent as output declined 1.3 percent and hours fell 1.6 percent.
In total manufacturing, output per hour increased 2.4 percent from the second quarter of 2007 to the second quarter of 2008. For the entire 2000-2007 period, manufacturing productivity grew at a 3.7 percent annual rate.
The trend of strong productivity growth has resulted in the decline in manufacturing employment.
Year to date August 2008, U.S. manufactured goods exports accounted for 61.3 percent of all U.S. exports of goods and services, compared with 62.4 percent a year ago. During that same period, manufactured goods exports were up 15.8 percent above year ago levels, while imports were up 5.3 percent. The trade deficit in manufactures improved to $449.4 billion (annual basis) for 2008, down from $527.2 billion a year ago.
In September 2008, shipments of manufactured durable goods increased $0.4 billion or 0.2 percent to $208.8 billion, up three of the last four months. This followed a 4.2 percent August decline.
Machinery, up following two consecutive monthly decreases, had the largest increase in the value of shipments of $1.2 billion or 4.3 percent to $30.2 billion. Shipments also increased in Motor vehicles and parts (3.2 percent). Shipments, however, decreased in Primary metals (-3.2 percent); Computer and electronic products (-2.1 percent); and Electrical equipment, appliances and components (-0.2 percent).
In September 2008, the Producer Price Index (PPI) for finished goods, except foods and energy, rose 0.4 percent, after increasing by 0.2 percent in August. The index for finished energy goods fell 2.9 percent in September following a 4.6 percent decline in the preceding month. The index for gasoline fell 0.5 percent in September after moving down 3.5 percent a month earlier. The declines in prices for liquefied petroleum gas and diesel fuel were also less than the declined recorded in August.
By contrast, partially offsetting the slowing declines in finished energy goods prices, the index for residential natural gas dropped 8.2 percent after moving down 5.0 percent in August. The index for finished consumer goods, except foods and energy, advanced 0.5 percent in September, after increasing by 0.2 percent in August. The index for finished consumer foods climbed 0.2 percent after rising 0.3 percent in the previous month.
In September 2008, the ISM index of manufacturing registered 43.5 percent, 6.4 percentage points lower than the 49.9 percent reported in August. This is the lowest reading since October 2001 when the PMI registered 40.8 percent. 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 September, while the overall economy expanded for the 83rd 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 September were: New Orders down 9.5 percent, Production down 11.3 percent, Employment down 7.9 percent, Supplier Deliveries up 2.2 percent, and Inventories down 5.9 percent.
U.S. Industries Reporting Growth in September 2008
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