NAM: Monday Economic Report
Michigan created the most net new manufacturing jobs in September, adding 5,200 workers. Other states with notable employment growth for the month included Wisconsin (up 4,800), Maine (up 4,700), Florida (up 3,700), South Carolina (up 3,600), Georgia (up 3,300) and Ohio (up 3,100). Despite gains over the past five months, manufacturing employment figures continue to experience sizable declines due to COVID-19.
The IHS Markit Flash U.S. Manufacturing PMI edged slightly higher in October, notching the best reading since January 2019, buoyed by strength in new orders. Manufacturers remained upbeat about continued solid growth in production over the coming six months.
Mirroring other regions, manufacturing activity in the Kansas City Federal Reserve Bank’s district expanded for the fifth straight month, continuing to rebound from sharp declines in the spring from the COVID-19 pandemic. Input prices rose at the fastest pace since November 2018.
Elsewhere, the IHS Markit Flash Eurozone Manufacturing PMI continued to rebound in October, with new orders, output and exports each expanding at rates not seen since early 2018. German manufacturers reported the strongest manufacturing growth in 30 months, buoyed by the best output reading since February 2011.
With that said, overall business activity in Europe shrank in October for the first time since June, with the Flash Eurozone PMI Composite Output Index dropping from 50.4 to 49.4 on renewed contractions in the service sector amid renewed COVID-19 concerns.
New housing starts rose 1.9% to 1,415,000 units at the annual rate in September, with single-family residential construction having the best reading since June 2007 at 1,108,000 units. The housing market has been boosted by historically low mortgage rates, which hit another record low last week. On a year-over-year basis, housing starts have risen 11.1% from 1,274,000 units in September 2019, with single-family activity jumping 22.3% over the past 12 months.
For their part, builders also feel more upbeat in their expectations for single-family sales over the next six months, with sentiment reaching another all-time high in October.
Existing home sales jumped to the highest level since May 2006, up 9.4% from 5.98 million units in August to 6.54 million units in September. Over the past 12 months, existing home sales have risen 20.9%, up from 5.41 million units in September 2019. Inventories of existing homes for sale dropped to an all-time low, with just 2.7 months of supply in September.
The Conference Board’s Leading Economic Index rose 0.7% in September, increasing for the fifth straight month but still 4.1% lower than pre-pandemic levels in February.