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Manufacturing Biweekly Update

September 3, 2010 [past updates]


U.S. Manufacturing Trends Current Period Year-to-Date
Wage Rates up up
Profits up up
Employment down down
Production up up
Capacity Utilization up up
Productivity up up
Exports up up
Goods Shipments up up


Biweekly Notes

US manufacturing grows for 13th straight month

U.S. manufacturing expanded in August for the 13th straight month, lifting hopes that economic growth won't stall. The Institute for Supply Management said Wednesday its manufacturing index rose to 56.3 in August from 55.5 in July. A reading above 50 indicates growth. Manufacturing has helped lead the economy out of the worst recession since the 1930s. The trade group's index has surged since late 2009 and hit a 6-year high in April. But as economic growth has slowed this summer, expansion in the manufacturing sector has leveled off. Another strong month at U.S. factories helped ease fears on Wall Street of a second recession. Stocks soared after the report's release. The Dow Jones industrial average rose more than 240 points in morning trading.

(AP|Yahoo News|September 1, 2010) news.yahoo.com

Unemployment rises slightly in August; manufacturers cut 27,000 jobs
The nation's jobless rate worsened slightly last month, edging up to 9.6% from 9.5% in July, the government said Friday in a report that had little for workers to cheer about this Labor Day weekend. Overall, the American economy lost 54,000 net jobs in August as another 114,000 temporary census workers were dismissed from the federal government's payrolls. Aside from the staffing changes at the Census Bureau, which has been trimming jobs added earlier in the year for the decennial population count, private-sector employers added a modest 67,000 jobs over the month. The nation's manufacturers, which had been growing all year and leading the weak jobs recovery, fell back in August, cutting 27,000 from their payrolls. Budget-strapped state governments shed another 14,000 jobs.

(LA Times|September 3, 2010)
www.latimes.com

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U.S. Manufacturing Key Facts

Manufacturing Wage Rates updated

  • In August 2010, average hourly earnings in manufacturing were $18.57 (preliminary), up 0.05 percent from July 2010’s $18.56 (preliminary), and up 1.4 percent from August 2009’s $18.31.
       

(BLS/DOL Employment data from “The Employment Situation, USDL 10-1212,” released September 3, 2010; next release is October 8, 2010)
http://www.bls.gov/news.release/pdf/empsit.pdf

Manufacturing Wage Rates (Quarterly, Yearly) updated

  • During the second quarter of 2010, hourly compensation from previous quarter, annual rate (revised) was down 2.0 percent in total manufacturing, down 1.9 percent in durable manufacturing and down 2.1 percent in nondurable manufacturing.

  • In the second quarter of 2010, hourly compensation of all manufacturing workers decresed 0.3 percent (revised), compared to a 5.9 percent increase during the second quarter of 2009. Real hourly compensation in the total manufacturing sector decreased 2.1 percent (revised) in the second quarter of 2010, compared to 7.0 percent increase in the second quarter of 2009.

    (BLS/DOL Productivity data from “Productivity and Costs, Second Quarter 2010, Revised,” USDL 10-1211, released September 2, 2010; next release is November 4, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

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Manufacturing Profits updated

  • In the first quarter of 2010, manufacturing profits increased 46.5 percent, or $79.5 billion, to $250.4 billion from $170.9 billion in the fourth quarter. Compared with first quarter profits of 2009, manufacturing profits were up $109.4 billion in the first quarter of 2010. (NOTE: The manufacturing profits for second quarter 2010 will be updated in the next release.)

  • Second quarter 2010 profits for all non-financial industries (manufacturing being a subcategory) increased 7.0 percent from the first quarter of 2010 to $1054.2 billion.

    (BEA/DOC GDP data from “Gross Domestic Product and Corporate Profits, BEA 10-41,”released August 27, 2010; next release is September 30, 2010)
    http://www.bea.gov/newsreleases/national/gdp/2010/pdf/gdp2q10_2nd.pdf

       

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Manufacturing Employment updated

  • In August, 2010, manufacturing employment went down, with a decrease of 27,000 jobs.

  • In August, durable goods manufacturing lost 24,000 jobs, with decreases in transportation equipment (-21,400), wood products (-3,000), fabricated metal products (-1,700), furniture and related products (-1,000), machinery (-900), nonmetallic mineral products (-800), and miscellaneous manufacturing (-300). Job gains occurred in computer and electronic products (2,600), electrical equipment and appliances (900), and primary metals (700).

  • In August, nondurable goods manufacturing lost 3,000 jobs, with decreases in printing and related support activities (-2,700), textile mills (-1,800), food manufacturing (-1,300), petroleum and coal products (-300), textile product mills (-200), and chemicals (-100). Meanwhile, job gains occurred in plastics and rubber products (1,600), leather and allied products (900), apparel (400), beverages and tobacco product (400), and paper and paper products (300).

  • The manufacturing employment of 11.7 million workers represents 9.0 percent of total non-farm employment.

    (BLS/DOL Employment data from “The Employment Situation, USDL-10-1212,” released September 3, 2010; next release is October 8, 2010) http://www.bls.gov/news.release/pdf/empsit.pdf

       

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Manufacturing Production

  • In July 2010, manufacturing production was up 1.1 percent from previous month and was 8.1 percent above its year-earlier level.

  • Production of durable goods was up 2.1 percent from previous month. The durable manufacturing industries that registered increases in output included motor vehicles and parts (9.9 percent), nonmetallic mineral products (3.4 percent), aerospace and miscellaneous transportation equipment (1.7 percent), fabricated metal products (1.5 percent), miscellaneous (1.3 percent), machinery (1.1 percent), computer and electronic products (1.1 percent), furniture and related products (0.6 percent), and primary metal (0.3 percent). The durable industry that registered decreases in output included wood products (-1.2 percent) and electrical equipment, appliances and components (-0.6 percent).

  • The production of nondurable goods was up 0.1 percent from previous month. The nondurable manufacturing industries that registered increases in output included textile and product mills (2.7 percent), petroleum and coal products (0.9 percent), chemical (0.6 percent), paper (0.5 percent), plastics and rubber products (0.2 percent). The nondurable industry that registered decreases in output included apparel and leather (-1.7 percent), printing and support (-0.9 percent), and food, beverage and tobacco products (-0.8 percent).

  • The index for other manufacturing industries (non-NAICS) was up 1.5 percent from previous month.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released August 17, 2010; next release is September 15, 2010)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Capacity Utilization

  • In July 2010, manufacturing industries (NAICS based) operated at 72.4 percent of capacity, 6.6 percentage points below their 1972-2009 average of 79.0 percent and 0.8 percent points higher than their revised capacity utilization level in June 2010.

  • In durable manufacturing, capacity utilization operated at 70.8 percent capacity, up 1.4 points from June. Increased capacity utilization was registered in motor vehicles and parts (6.0 points), nonmetallic mineral products (2.0 points), fabricated metal products (1.2 points), aerospace and miscellaneous transportation equipment (1.1 points), machinery (0.9 points), furniture (0.7 points), miscellaneous (0.7 points), computer and electronic products (0.3 percent), primary metals (0.1 percent). Decreased capacity utilization was demonstrated in wood products (-0.4 points), and electrical equipment, appliances, and components (-0.4 points).

  • In non-durable manufacturing, capacity utilization increased 0.1 percentage points in July from June (revised) to 74.4 percent. Increased capacity utilization was registered in textile and product mills (2.1 points), petroleum and coal products (0.8 points), paper (0.6 points), chemical (0.4 points) and plastics and rubber products (0.1 points). Decreased capacity utilization was registered in apparel and leather (-0.8 points); food, beverage, and tobacco products (-0.6 points); and printing and support (-0.4 points).

  • The index for other manufacturing industries (non-NAICS) increased 1.0 points from last month.

    (Federal Reserve Statistical data from “Industrial Production and Capacity Utilization, G17 (419),” released August 17, 2010; next release is September 15, 2010)
    http://www.federalreserve.gov/releases/g17/Current/g17.pdf

       

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Manufacturing Productivity updated

  • Manufacturing sector productivity (revised) rose 4.1 percent in the second quarter of 2010, as output increased 8.4 percent and hours increased 4.1 percent. Productivity grew 9.9 percent in the durable goods industries and shrank 2.4 percent in the nondurable goods industries. Unit labor costs in manufacturing declined 5.9 percent in the second quarter of 2010 and fell 7.3 percent over the last four quarters.

  • In durable goods industries, productivity (revised) grew 9.9 percent from previous quarter, annual rate in the second quarter of 2010, as output increased 13.6 percent, while hours worked also increased 3.4 percent.

  • In nondurable goods industries, productivity (revised) fell 2.4 percent from previous quarter, annual rate in the second quarter of 2010, as output increased 2.8 percent, while hours worked also increased 5.3 percent.

    (BLS/DOL Productivity data from “Productivity and Costs, Second Quarter 2010 Revised,” USDL 10-1211, released September 2, 2010; next release is November 4, 2010)
    http://www.bls.gov/news.release/pdf/prod2.pdf

       

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Manufacturing Trade

  • Year to date June 2010, U.S. manufactured goods exports accounted for 80.8 percent of all U.S. exports of goods, compared with 82.1 percent a year ago.

  • Manufactured goods exports in May were 3.1 percent higher than the previous month. Imports were up 10.6 percent.

  • The year to date June 2010 trade deficit in manufactured goods of $175.8 billion was $37.1 billion more when compared with $138.6 billion a year ago.

    (Census/BEA/DOC Foreign Trade Statistics data from “U.S. International Trade in Goods and Services, CB10-121, BEA10-40, FT-900(10-06),” released August 11, 2010; next release is September 9, 2010)
    http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf

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Manufactured Goods Shipments updated

  • Shipments of manufactured durable goods in July, up four of the last five months, increased $4.4 billion or 2.2 percent to $200.6 billion. This followed a 0.2 percent June increase. Transportation equipment, also up four of the last five months, had the largest increase, $3.4 billion or 6.9 percent to $52.7 billion.

  • In July, shipments increased in transportation equipment (6.9 percent), computer and electronic products (6.8 percent), and electrical equipment, appliances, components (0.1 percent). Shipment decreased in, machinery (-4.6 percent), fabricated metal products (-0.9 percent), and primary metals (-0.1 percent).

    (Census Bureau/DOC data from “Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders (M3-1(10)-07, CB10-127),”August 25, 2010; next release is September 24, 2010)
    http://www.census.gov/manufacturing/m3/

       

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Manufactured Goods Prices

  • In July 2010, the Producer Price Index (PPI) for finished goods, except foods and energy, increased by 0.3 percent compared to previous month.

  • The index for finished energy goods was down 0.9 percent from previous month.

  • A seasonally adjusted decrease of price from June to July was registered in home heating oil and distillates (-3.5 percent), No. 2 diesel fuel (-0.9 percent), liquefied petroleum gas (-10.0 percent), and gasoline price (-2.2 percent). A seasonally adjusted increase of price was registered in residential gas (3.1 percent), and residential electric power (1.2 percent).

    (BLS/DOL data from “Producer Price Indexes, USDL 10-0965,” released August 17, 2010; next release is September 16, 2010)
    http://www.bls.gov/news.release/pdf/ppi.pdf

       

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Institute for Supply Management's (ISM) Index  updated

  • Economic activity in the manufacturing sector expanded in August for the 13th consecutive month, and the overall economy grew for the 16th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®.

  • Manufacturing continued to grow in August as the PMI registered 56.3 percent, an increase of 0.8 percentage point when compared to July's reading of 55.5 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

  • The percentage-point changes in the components of the PMI in August were: Production increased 2.9 points to 59.9, Employment up 1.8 points to 60.4, Inventories up 1.2 points to 51.4, Supplier Deliveries down 1.7 points to 56.6, and New Orders decreased 0.4 points to 53.1.

    U.S. Industries Reporting Growth in August 2010

    • Primary Metals
    • Apparel, Leather & Allied Products
    • Transportation Equipment
    • Fabricated Metal Products
    • Electrical Equipment, Appliances & Components
    • Miscellaneous Manufacturing
    • Computer & Electronic Products
    • Paper Products
    • Chemical Products
    • Food, Beverage & Tobacco Products
    • Printing & Related Support Activities

    Institute for Supply Management data released September 1, 2010; next release is October 1, 2010)
    http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942

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Prepared by
Director of Office of Trade Industry Information
Manufacturing and Services
International Trade Administration
U.S. Department of Commerce
(202) 482-4691