Tuesday, October 6, 2015

U.S. Foreign Trade Deficit Widens in August

The U.S International trade deficit increased in August to $48.3 billion, up $6.5 billion from June. The higher deficit reflected a decrease in exports and an increase in imports. August exports were $185.1 billion, down $3.7 billion. Imports were $233.4 billion, $2.8 billion more than in July.

The goods deficit increased $6.6 billion to $67.9 billion, while the surplus in services increased $0.1 billion to $19.6 billion.

Exports of goods decreased $4.1 billion to $124.5 billion, driven by a $2.2 billion decrease in industrial supplies and materials. Exports of services increased $0.4 billion to $60.6 billion, driven by a $0.1 billion increased in financial services.

Imports of goods increased $2.5 billion to $192.4 billion, largely due to a $2.1 billion increase in cell phones and other household goods. Imports of services increased $0.3 billion to $41.1 billion, mostly due to travel and freight services.

The petroleum deficit decreased $1.2 billion from the previous month and $7.2 billion from the previous year to $6.9 billion.

Read the Census/BEA release.

Monday, October 5, 2015

ISM: Non-Manufacturing Index Fell

The Non-Manufacturing ISM Report on Business Index fell to 56.9 in September, down 2.1 points from August, but still positive, as readings above 50 indicate growth in the sector. Thirteen non-manufacturing industries reported growth in August, while four – Mining; Arts, Entertainment & Recreation; Retail Trade and Other Services – reported contractions.

The Business Activity Index registered 60.2, down 3.7 points from August’s reading. Respondents noted that the business climate has been improving, and firms are making more marketing efforts and rolling out capital improvement projects.

Non-manufacturing employment continued to grow, increasing 2.3 points to 58.3 percent. Employment has been growing for 19 consecutive months. Respondents noted increasing staffing for new programs and expanded business offerings. Ten industries reported growth in employment, while five industries – Mining; Arts, Entertainment & Recreation; Real Estate; Rental & Leasing; Public Administration and Retail Trade – reported a reduction in employment.

The New Orders index fell 6.7 points on the month to 56.7, but still grew overall for the 74th consecutive month. Respondents indicated that business is expanding as new, very large projects begin.

Supplier deliveries slowed as the index registered 52.5 points, consistent with the previous month. Readings above 50 indicate slower deliveries. Thirteen industries reported slower or no change to supplier deliveries while five industries – Mining; Utilities; Information; Finance & Insurance and Retail Trade – reported faster deliveries.

Read the ISM report.

Friday, October 2, 2015

Manufactured Goods Orders Down 1.7 Percent in August

New orders for manufactured goods fell in August after two consecutive monthly increases, dropping 1.7 percent to $473.0 billion.

New orders for manufactured durable goods fell 2.3 percent to $235.5 billion, following a 1.9 percent increase in July. New orders for transportation equipment led the decrease, falling 6.1 percent to $78.3 billion, as new orders for non-defense aircraft and parts, and ships and boats fell 5.9 and 27.4 percent respectively.

Shipments decreased 0.7 percent to $480.1 billion, following a 0.2 percent decrease in July. Inventories declined by 0.3 percent to $648.4 billion, following a 0.3 percent decrease in July. Unfilled orders fell 0.2 percent to $1,195.0 billion, after a 0.2 percent increase. The unfilled orders-to-shipments ratio was 6.87, down from 6.89 last month.

Read the Census release.

142,000 Jobs Added in September

Total nonfarm payroll employment rose by 142,000 in September, an increase from last month’s downwardly revised 136,000. The unemployment rate remained at 5.1 percent, within the Federal Reserve’s full employment estimate of 5.0 and 5.2 percent.

The majority of job gains were in health care and social assistance, which added 36,400, down from the 47,600 added in August. The leisure and hospitality sector followed with 35,000 jobs added, an increase of 3,000 from August.

Goods-producing industries shed jobs again in September. The mining industry shed 12,000, and the manufacturing industry dropped 9,000. Construction added 9,000 jobs and motor vehicles and parts added 2,100.

The civilian labor force participation rate fell to 62.4 percent, after holding at 62.6 percent for the past three months.

The number of long-term unemployed, those jobless for 27 weeks or more, was 2.1 million, down 83,000 from the previous month. This group accounts for 26.6 percent of the unemployed. The number of discouraged workers, those not looking for work because they believe no jobs are available, was 635,000, little changed from a year ago.

Average hourly earnings fell 1 cent to $25.09, following a 9 cent gain in August. Year-over-year, hourly earnings have risen by 2.2 percent.

Read the BLS release.

Thursday, October 1, 2015

Construction Spending Up 0.7 Percent in August

Construction Spending grew 0.7 percent in August to $1,086.2 billion (SAAR). July spending was revised down to $1,079.1 billion (0.4 percent growth). Construction spending during the first 8 months of 2015 amounted to $683.4 billion, 9.8 percent higher than in the first 8 months of 2014.

Total private construction spending rose to $788.0 billion (SAAR), 0.7 percent above the revised July estimate of $782.3 billion.

Private residential construction spending rose to a seasonally adjusted annual rate of $383.3 billion (SAAR), up 1.3 percent from July’s estimate as construction of both single and multi-family units increased.

Private non-residential construction spending reached a rate of $404.7 billion (SAAR), up 0.2 percent from the previous month, as construction related to lodging, manufacturing and power increased.

Public construction spending grew 0.5 percent to $298.2 billion (SAAR), after declining in July. Power-related construction posted the strongest gains for the month, increasing 10.0 percent from July.

Read the Census release.

Manufacturing Growth Slowed for Third Consecutive Month

The ISM Manufacturing Index fell to 50.2 points in September – down 0.9 from August’s reading. However, the manufacturing sector is still growing, as readings above 50 indicate expansion. Of the 18 component industries, 7 reported growth in September, down from 10 in August. Respondents’ sentiment was mixed, with some reporting increased business, while others reported slowing due to nervous consumers.

The employment index declined 0.7 points to 50.5 – still growing, but at a slower pace than in previous months. September marked the third consecutive month of slower growth in manufacturing employment. Eight of the eighteen industries reported employment growth, while nine, including Petroleum, Primary Metals, and Plastics and Rubber Products, reported contraction.

The index for new orders fell 1.6 points from August’s reading to 50.1 percent, growing at a slower pace than the previous month.

Export orders registered 46.5 percent in September, the same as August and the fourth consecutive month of decreases (readings below 50 indicate contraction). Five industries – Furniture & Related Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Chemical Products; and Fabricated Metal Products – reported growth in exports, while 11 industries, including Wood Products and Petroleum Products, reported contraction.

The inventories Index registered 48.5 points, the same as in August, indicating that raw materials inventories contracted for the third consecutive month.

The price index fell 1 point to 38.0, indicating that raw materials prices have decreased for the 11th consecutive month.

Read the ISM release.

Computer Industry Cuts over 30,000 Jobs in September

Employers announced plans to cut 58,877 jobs in September, according to a report issued by Challenger, Gray & Christmas. September’s announced cuts marked a 43 percent increase from the cuts announced in August and was the third largest of the year.

More than half of September’s cuts came from the computer industry, which announced plans to reduce payrolls by 32,500. Hewlett Packard’s 30,000 planned reduction made up the majority of the cuts.

Year-to-date, the industry has announced 58,874 cuts, just below 59,928 for all of 2014.

On a quarterly basis, 205,759 job cuts were announced in the third quarter, up 40 percent from the cuts announced in the second quarter. Year-to-date, 493,431 layoffs have bene planned, up 36 percent from the first 9 months of 2014.

“Job cuts have already surpassed last year’s total and are on track to end the year as the highest annual total since 2009, when nearly 1.3 million layoffs were announced at the tail-end of the recession,” said John A. Challenger, CEO of Challenger, Gray & Christmas.

The energy sector experienced the greatest number of cuts for the year, losing 72,708 jobs to date. Layoffs in the sector have slowed, however, as only 12,208 of those jobs were lost in the most recent quarter.

“While oil cuts have slowed, the issues that helped drive oil prices down in the first place are still impacting the economy,” said Challenger. “We could see more fallout, which appears to have its origins in China, which after years of building up its national infrastructure appears to now have far too much capacity. As a result, manufacturing plants, retail stores, and even entire apartment buildings are sitting empty.”

Read the release.