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NAM: Monday Economic Report

In other news about the sector, manufacturing job openings ticked higher, up from 314,000 in November to 325,000 in December, a three-month high. Postings in the sector have trended lower since achieving an all-time high of 397,000 in April. On the positive side, job openings remain quite elevated overall, especially relative to net hiring. As such, we would expect employment growth to accelerate with a turnaround in demand and production. For now, however, job growth has continued to be weak. Net hiring (or hiring minus separations) in the manufacturing sector rose from a decrease of 3,000 workers in November to a gain of 9,000 employees in December. In the larger economy, nonfarm job openings changed little, down from 5,505,000 in November to 5,501,000 in December.

Meanwhile, consumer confidence pulled back in February from January’s levels, which had represented the survey’s best reading in 13 years. The Index of Consumer Sentiment declined from 98.5 in January to 95.7 in February, according to preliminary figures. Richard Curtin, the Survey of Consumers chief economist, noted that confidence has been sharply divided along partisan lines since the election. With that said, Americans are more confident today than just a few months ago, which is encouraging. The stronger perceptions about the economic outlook have helped to fuel more spending, with Americans more willing to make purchases, including with credit cards. Indeed, U.S. consumer credit outstanding rose 4.5 percent at the annual rate in December, with year-over-year growth of 6.4 percent.

We will be looking for signs of improved manufacturing activity this week with the release of January’s industrial production data. Manufacturing production rebounded somewhat in December, but over the past 12 months, output was up a rather stagnant 0.2 percent. Sentiment surveys have reflected increased optimism of late, and we will get another look at such assessments with new surveys from the New York and Philadelphia Federal Reserve Banks. Other highlights this week include new releases for consumer and producer prices, housing starts and permits, leading indicators and small business confidence.

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