NAM: Monday Economic Report
The Institute for Supply Management® reported that manufacturing activity contracted for the fifth straight month, falling to the lowest level since June 2009. Indeed, even as other measures have shown some stabilization in the sector, the headline index from ISM® declined from 48.1 in November to 47.2 in December.
This suggested that the manufacturing sector remained weak in December, with continued sales and export challenges and only cautious optimism for the coming months, according to the sample comments in the ISM® report.
In addition, private manufacturing construction declined 2.4% in November to a five-month low. Spending in the sector has been more sluggish than desired over the past few years, and yet, activity rose a modest 2.1% over the past 12 months.
The Dallas Federal Reserve Bank noted rebounding new orders, production, shipments and capacity utilization data in December, even as the composite index dropped from -1.3 in November to -3.2 in December. The headline measure contracted for the third straight month, with seven negative readings in 2019. The outlook for the next six months remained positive.
In advance statistics, the goods trade deficit narrowed to the lowest level since October 2016, with goods imports dropping to a 25-month low. Final data will be released Jan. 7.
Meanwhile, consumer confidence has remained relatively constant over the past four months, according to the Conference Board. Respondents in the latest survey felt more positive in their assessments of current conditions, but their view of the economic outlook weakened somewhat. Confidence levels remained elevated overall, buoyed by the strong labor market, even with some lingering anxieties and some worries about the income outlook.
Speaking of jobs, this week will bring new employment data for December. The manufacturing workforce rebounded in November in the wake of the auto strike, with the sector adding just more than 5,000 additional employees per month year to date in 2019, down from 22,800 each month over the same time frame in 2018. Look for additional slight growth in December to end the year, with the overall labor market remaining solid.
Other highlights this week include updates on consumer credit, factory orders and shipments, international trade and real GDP by industry.