{"id":1788,"date":"2020-07-15T11:43:40","date_gmt":"2020-07-15T15:43:40","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1788"},"modified":"2020-07-15T11:43:40","modified_gmt":"2020-07-15T15:43:40","slug":"june-industrial-production-import-and-export-prices-help-wanted-online-and-july-new-york-manufacturing","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1788","title":{"rendered":"June Industrial Production, Import and Export Prices, Help Wanted OnLine and July New York Manufacturing"},"content":{"rendered":"\n

KEY DATA:<\/u><\/strong>  IP: +5.4%; Manufacturing: +7.2%\/ Import Prices: +1.4%; Fuel: +21.9%; Export Prices: +1.4%; Farm: +1.4%\/ HWOL: +5.2 points\/ Empire State: +17.4 points; Expectations: -18.1 points<\/p>\n\n\n\n

IN A NUTSHELL:<\/u><\/strong>  \u201cManufacturing continues to improve as the vehicle sector starts to return to normal production levels.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT MEANS:<\/u><\/strong>  One thing about math, you can get some very amazing changes when you start with very low numbers.  Industrial production soared in June as the manufacturing sector reopened.  Leading the way was the vehicle sector,<\/em><\/strong> which had shut down almost completely in April.  Plants started reopening in May and then ramped up production in June to such an extent that half of the total manufacturing production increases in those two months came from rising assembly rates alone.<\/em><\/strong>  It is not clear that sales will continue to jump, so don\u2019t expect the July vehicle or manufacturing numbers to look nearly as strong as they were in May and June.  Still, the story was not just SUVs.  Every single manufacturing group posted a gain in June.  That rarely happens.<\/em><\/strong>  Warm, not hot weather led to a surge in utility production, but oil and gas drilling continued to shut down.<\/p>\n\n\n\n

Import prices, which had also cratered in March and April, are starting to rebound.  But most of the gain came from the recovery of energy costs.  Few other sectors showed significant gains.<\/em><\/strong>  With imported food costs rising modestly, there could be some easing in the price pressures that we have seen in consumer prices.  On the export side, farmers got some decent increases, but their prices are still down sharply over the year.<\/em><\/strong><\/p>\n\n\n\n

Firms are starting to hire again and that means they need to advertise, at least a little more.  The Conference Board\u2019s Help Wanted OnLine index rose solidly in June<\/em><\/strong> and was back to 2017 levels.  That said, it remains well below the peak posted in January.<\/p>\n\n\n\n

Not surprisingly, the New York Fed\u2019s Empire State Manufacturing Index jumped in July<\/em><\/strong>.\u00a0 This is a diffusion index, which we know changes dramatically with the economy reopening.\u00a0 So let\u2019s look at not just the index, but for me the key number, those reporting \u201clower\u201d.\u00a0 For the general business conditions, employment, production and new orders indices, that number remains in the mid-20% range.\u00a0 That is still high.\u00a0 The jobs index itself was largely flat while hours worked were still falling, though modestly.\u00a0 Worse, expectations are beginning to react to the surging virus and are falling. <\/em><\/strong><\/p>\n\n\n\n

IMPLICATIONS:We are at a crucial point in the recovery.\u00a0 The virus is getting out of control in a number of large states and new cases are even beginning to rise in most states that didn\u2019t reopen early.<\/em><\/strong>\u00a0 School openings are unclear, sporting events are being run without spectators, downtown office building remain largely ghost towns in many major cities and our politicians cannot decide what is the best way to proceed.\u00a0 With federal guidance limited, local decision making down to school district levels is predominating. \u00a0The resulting patchwork process of safety and reopenings is showing signs of faltering.<\/em><\/strong>\u00a0 I wrote in April that I expected a major decline in the spring quarter and a sharp, but not nearly as large rise in the fall.\u00a0 That is likely to still be the case, though the third quarter gain could be less than many had hoped for.\u00a0 It will still be record-setting, but not the nearly twenty percent rise that many forecasters expect (Blue Chip consensus is roughly 18%).\u00a0 Forecasting economic data these days is much more daunting than in the past.<\/em><\/strong>\u00a0 Even then, I often just had my award-winning cat pick a number.\u00a0 As an economist who is a member of just about every major forecasting panel, I have to come up with numbers each week.\u00a0 But truthfully, most of us are largely guessing.\u00a0 Thus, when markets move on results that are above or below expectations, those reactions are irrational since the numbers often are based on models that don\u2019t work well under the current circumstances.So, try not to get too excited by what seem to be good numbers or too distressed by bad ones.\u00a0 Over time, we might discover that they were neither that strong nor that weak.\u00a0<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA:  IP: +5.4%; Manufacturing: +7.2%\/ Import Prices: +1.4%; Fuel: +21.9%; Export Prices: +1.4%; Farm: +1.4%\/ HWOL: +5.2 points\/ Empire State: +17.4 points; Expectations: -18.1 points IN A NUTSHELL:  \u201cManufacturing continues to improve as the vehicle sector starts to return to normal production levels.\u201d WHAT IT MEANS:  One thing about math, you can get some … Continue reading June Industrial Production, Import and Export Prices, Help Wanted OnLine and July New York Manufacturing<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1788","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1788"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1788\/revisions"}],"predecessor-version":[{"id":1789,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1788\/revisions\/1789"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}