NAM: Monday Economic Report
Producer prices for final demand goods and services rose 1.0% in March, with producer prices for final demand goods increasing 1.7%, the largest monthly gain since the series began in November 2009. Over the past 12 months, producer prices for final demand goods and services have jumped by a seasonally adjusted 4.3%, the biggest increase since September 2011. Core producer prices have risen 3.1% since March 2020, the fastest pace since October 2018.
Manufacturing leaders continue to cite supply chain disruptions as a key challenge, with rising material costs topping the list of concerns in the latest NAM Manufacturers’ Outlook Survey. There is hope that these increases will be transitory, and at least for now, the Federal Reserve appears to be more focused on stimulating economic growth than on inflationary worries.
New orders for manufactured goods declined 0.8% in February, largely on weather and supply chain challenges. Despite the weaker monthly data, factory orders have risen 1.9% over the past 12 months, with 3.6% growth year-over-year with transportation equipment excluded.
New orders for core capital goods—a proxy for capital spending in the U.S. economy—declined 0.9% from January’s record high. Overall, however, core capital goods orders have risen a robust 8.2% over the past 12 months, speaking to the brighter economic outlook.
There were 538,000 manufacturing job openings in February. Overall, these data offer an encouraging sign that manufacturers are confident enough about the coming months to post new jobs.
In the larger economy, there were 7,367,000 nonfarm business job openings in February, the best reading since January 2019. That translated to 1.35 unemployed workers for every one job opening in the U.S. economy, down from 1.43 in January.
The U.S. trade deficit rose to $71.08 billion in February, an all-time high, with goods exports falling by more than goods imports for the month. Goods exports remain down 5.15% year-over-year despite progress since last spring, whereas goods imports have recovered much quicker, up 10.31% over the past 12 months.
According to the latest data, U.S.-manufactured goods exports totaled $161.17 billion in January and February, using non-seasonally adjusted data, dropping 8.59% from $176.31 billion year to date in 2020.
U.S. consumer credit outstanding soared 7.9% in February, rebounding after being flat in January. While revolving credit has fallen 11.2% year-over-year, this category jumped 10.1% in February. It is hoped that this is the beginning of a new trend, with Americans more willing to spend and take on credit. This would be welcome news for retailers (and manufacturers).