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Manufacturing Biweekly Update

August 21, 2009 [past updates]




U.S. Manufacturing Trends Current Period Year-to-Date Previous Year
Wage Rates up up up
Profits down down down
Employment down down down
Production up down down
Capacity Utilization down down down
Productivity up down down
Exports up down down
Goods Shipments down down down


Biweekly Notes

New jobless claims rise unexpectedly to 576K

The number of first-time claims for unemployment benefits rose unexpectedly for the second straight week, a sign that jobs remain scarce even as other data show the economy is stabilizing. Many economists expect the economy to grow at a modest pace in the second half of this year, bringing an end to the longest recession since World War II. But jobs are likely to remain scarce and many analysts worry that persistently high unemployment could cause consumers to hold back on spending, threatening a recovery. The Labor Department said Thursday the number of new jobless claims rose to a seasonally adjusted 576,000 last week, from a revised figure of 561,000. Wall Street economists expected a drop to 550,000, according to a survey by Thomson Reuters.

(AP|Yahoo| August 20, 2009)
http://news.yahoo.com/s/ap/20090820/ap_on_bi_go_ec_fi/us_economy

Existing home sales in U.S. jump to two-year high

Sales of existing U.S. homes jumped more than forecast in July to the highest level in almost two years, signaling the housing crisis that crippled the world’s largest economy is easing. Purchases climbed 7.2 percent to a 5.24 million annual rate, the most since August 2007, the National Association of Realtors said today in Washington. The gain was the biggest since records began in 1999. The median price fell 15 percent. Foreclosure-driven declines in prices, government credits for first-time buyers and near-record-low borrowing costs may keep stoking demand, helping the economy recover from the worst recession since the 1930s. Ongoing job losses are a reminder that more Americans will probably lose their homes, indicating a rebound will be slow to take hold. “More and more buyers are becoming convinced that there is not a lot of downside left in the housing market,” said Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “We can count on housing no longer being a drag. The economic recovery is on track.”

(Bloomberg| August 21, 2009)
http://www.bloomberg.com/apps/news?pid=20601087&sid=abRv8MobqnWA

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates

  • In July 2009, average hourly earnings in manufacturing were $18.19, up 0.33 percent from June 2009’s $18.13 (preliminary), and up 2.59 percent from July 2008’s $17.73.

    (BLS/DOL Employment data from “The Employment Situation: August 7, 2009, USDL 09-0908,” released July 2, 2009; next release is September 4, 2009)
    http://www.bls.gov/news.release/pdf/empsit.pdf

Manufacturing Wage Rates (Quarterly, Yearly) updated

  • During the second quarter of 2009, hourly compensation grew 5.8 percent in total manufacturing, 8.7 percent in durable manufacturing and 2.0 percent in nondurable manufacturing (seasonally adjusted annual rates). As revised, manufacturing hourly compensation increased 2.2 percent in the first quarter.

  • When consumer prices were taken into account, real hourly compensation of all manufacturing workers rose 4.4 percent in the second quarter, and 4.6 percent in the first quarter of 2009.

  • In the second quarter of 2009, hourly compensation of all manufacturing workers grew 6.0 percent, compared to a 5.3 percent increase (revised) during previous quarter. Real hourly compensation in the total manufacturing sector rose 7.0 percent in second quarter of 2009 after increasing by 5.5 percent (revised) in previous quarter.

    (BLS/DOL Productivity data from “Productivity and Costs, USDL 09-0933 Second Quarter, Preliminary,” released August 11, 2009; next release is September 02, 2009)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Profits

  • In the first quarter of 2009, manufacturing profits decreased 18.2 percent, or $27.0 billion, to $121.6 billion from $148.6 billion in the fourth quarter. Compared with first quarter profits of 2008, manufacturing profits were down $66.0 billion in the first quarter of 2009. First quarter 2009 profits estimates for all non-financial industries (manufacturing being a subcategory) increased 2.9 percent from the fourth quarter of 2008 to $758.0 billion.

    NOTE: This update reflects “the comprehensive (or benchmark) revision of the national income and product accounts (NIPAs). More information on the revision is available on BEA’s Web site at www.bea.gov/national/an1.htm, including links to an article in the March 2009 issue of the Survey of Current Business that discussed the changes in definitions and presentation that have been implemented in the revision and to an article in the May Survey that described the changes in statistical methods.”

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 09-33,”released July 31, 2009; next release is August 27, 2009)
    http://www.bea.gov/newsreleases/national/gdp/2009/pdf/gdp109f.pdf

       

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Manufacturing Employment

  • In July 2009, manufacturing employment fell by 52,000 when compared with June’s (preliminary) manufacturing employment levels.

  • In July, durable goods manufacturing lost 32,000 jobs, with decreases in most categories: Machinery (-15,200), Fabricated metal products (-14,100), Computer and electronic products (-7,400), Electrical equipment and Appliances (-5,100), Wood products (-5,000), Furniture and related products (-4,900), Miscellaneous manufacturing (-3,700), Nonmetallic mineral products (-2,100), and Primary metals (-1,800). However, an increase in employment was registered in Transportation Equipment (27,600).

  • In July, nondurable goods manufacturing lost 20,000 jobs. Job losses occurred in most categories: Plastics and rubber products (-7,100), Printing and related support activities (-4,800), Paper and paper products (-2,800), Chemicals (-2,600), Textile mills (-2,000), Food manufacturing (-900), Textile product mills (-800), Beverages and tobacco products (-700), and Petroleum and coal products (-500). However an increase in employment was registered in Apparel (1,000), and Leather and allied products (500).

  • • The manufacturing employment of 11.8 million workers represents 9.0 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation: June 2009, USDL 09-0908,” released August 7, 2009; next release is September 4, 2009)
    http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production updated

  • In July 2009, manufacturing output was up 1.0 percent and was 14.4 percent below its year-earlier level.

  • The production index for durable goods was up 2.2 percent. The durable manufacturing industries that registered increased in output included Motor vehicles and parts (20.1 percent), Primary metal (3.3 percent), Nonmetallic mineral products (2.3 percent), Aerospace and miscellaneous transportation equipment (0.9 percent),Wood products (0.7 percent), Miscellaneous (0.7 percent), Computer and electronic products (0.6 percent), Furniture and related products (0.2 percent). The durable manufacturing industries that registered decreases in output included Electrical equip., appliances, and components (-0.8 percent), Machinery (-0.5 percent), Fabricated metal products (-0.3 percent).

  • The production of nondurable goods decreased 0.1 percent. Industries that registered increases included Plastics and rubber products (0.9 percent), Paper (0.6 percent), Chemical (0.4 percent), Apparel and leather (0.1 percent), and Textile and product mills (-1.6 percent). Industries that registered decreases included Printing and support (-1.3 percent), Petroleum and coal products (-0.5 percent), Food, beverage, and tobacco products (-0.4 percent).

  • The index for other manufacturing industries (non-NAICS) decreased 0.6 percent in July.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released August 14, 2009; next release is September 16, 2009)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization updated

  • In July 2009, manufacturing industries (NAICS based) operated at 65.5 percent of capacity, 13.9 percentage points below their 1972-2008 average of 79.4 percent and 0.7 percentage points higher than their revised capacity utilization in June 2009.

  • In durable manufacturing, capacity utilization increased 1.8 percentage points in July from June (revised) to 59.1 percent. Increase capacity utilization was registered in Motor vehicles and parts (7.7 points),Primary metal (1.5 points),Nonmetallic mineral products (1.3 points),Aerospace and miscellaneous transportation equipment (0.7 point),Wood products (0.5 point), Furniture and related products (0.5 point),Miscellaneous (0.5 point), and Computer and electronic products (0.1 point). Decrease capacity utilization was registered in Electrical equip., appliances, and components (-0.5 point), Machinery (-0.2 point). Fabricated metal products remained unchanged.

  • Capacity utilization in non-durable manufacturing in July increased 0.1 percentage points from June (revised) to 72.5 percent. Increased capacity utilization was registered in Plastics and rubber products (0.8 points), Paper (0.5 points), Apparel and leather (0.4 points), and Chemical (0.3 points). Decreased capacity utilization was registered in Textile and product mills (-0.6 points), Printing and support (-0.5 points), Petroleum and coal products (-0.4 points), and Food, beverage, and tobacco products (-0.2 points).

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released August 14, 2009; next release is September 16, 2009)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity updated

  • Manufacturing productivity grew 5.3 percent in the second quarter of 2009, as output fell 9.9 percent and hours worked decreased 14.4 percent (seasonally adjusted annual rates). This was the largest quarterly gain in manufacturing productivity since the first quarter of 2005, when output per hour increased at a 7.3 percent annual rate. Over the last four quarters, manufacturing productivity declined 1.3 percent, as a 15.0 percent drop in output was largely offset by a 13.9 percent decline in hours worked. For the entire 2000-2008 period manufacturing productivity increased at a 3.3 percent annual rate.

  • In durable goods industries, productivity rose 3.9 percent in the second quarter of 2009, as output fell 16.5 percent and hours fell faster, -19.6 percent. This was the third consecutive quarter of double-digit declines in output and hours in the durable manufacturing sector.

  • In nondurable goods industries, productivity grew 2.0 percent in the second quarter, reflecting declines in output and hours of 3.4 percent and 5.3 percent, respectively.

    (BLS/DOL Productivity data from “Productivity and Costs, USDL 09-0933 Second Quarter 2009, Preliminary,” released August 11, 2009; next release is September 02, 2009)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade updated

  • Year to date June 2009, U.S. manufactured goods exports accounted for 82.1 percent of all U.S. exports of goods, compared with 80.7 percent a year ago. Manufactured goods exports in June were 3.7 percent higher than previous month, while imports were also up 6.2 percent. Year to date June 2009’s trade deficit in manufactured goods of $138.3 billion was $79.8 billion less when compared with $218.1 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB09-126, BEA09-36, FT-900,” released August 12, 2009; next release is September 10, 2009)
    http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf

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Manufactured Goods Shipments

  • Shipments of manufactured durable goods in June, down eleven consecutive months, decreased $0.3 billion or 0.2 percent to $168.3 billion. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 2.6 percent May decrease.
    Computers and electronic products, down five of the last six months, had the largest decrease, $0.4 billion or 1.6 percent to $27.4 billion. Shipments also decreased in Primary metals (-0.5 percent), and Electrical equipment, appliances and components (-0.3 percent). However, shipments increased in Transportation equipment (0.8 percent), Machinery (0.5 percent), and Fabricated metal products (0.3 percent).

    (Census Bureau/DOC data from “Manufacturers’ Shipments, Inventories and Orders (M3-1(09)-06, CB09-122),” July 29, 2009; next release is August 26, 2009)
    http://www.census.gov/indicator/www/m3/adv/pdf/durgd.pdf

       

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Manufactured Goods Prices

  • In June 2009, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.5.

  • The index for finished energy goods was up 6.6 percent in June. The index for Gasoline price increased 18.5 percent, liquefied petroleum gas 14.6 percent, Home heating oil and distillates 15.4 percent, and No. 2 diesel fuel 14.6 percent. The index for Residential gas increased 2.5 percent in June after declining 4.7 percent in May. The index for residential electric power declined 0.9 in June.

    (BLS/DOL data from “Producer Price Indexes, USDL 09-0811,” released July 14, 2009; next release is August 18, 2009)
    http://www.bls.gov/news.release/pdf/ppi.pdf

       

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Institute for Supply Management's (ISM) Index  

  • Economic activity in the manufacturing sector failed to grow in July for the 18th consecutive month, while the overall economy grew for the third consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®

  • Manufacturing contracted at a slower rate in July as the PMI registered 48.9 percent, which is 4.1 percentage points higher than the 44.8 percent reported in June. This is the 18th consecutive month of contraction in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

  • The percentage-point changes in the components of the PMI in July were: New Orders up 6.1 points to 55.3, Production up 5.4 points to 57.9, Employment up 4.9 points to 45.6, Supplier Deliveries up 1.4 points to 52.0, and Inventories up 2.7 points to 33.5.

U.S. Industries Reporting Growth in July 2009

  • Nonmetallic Mineral Products
  • Paper Products
  • Printing & Related Support Activities
  • Electrical Equipment, Appliances & Components
  • Transportation Equipment
  • Chemical Products

(Institute for Supply Management data released August 3, 2009; next release is September 1, 2009)
http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942

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Prepared by
Office of Trade Industry Information
Manufacturing and Services
International Trade Administration
U.S. Department of Commerce
(202) 482-2460-4691

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.

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