{"id":230,"date":"2014-06-16T10:33:07","date_gmt":"2014-06-16T14:33:07","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=230"},"modified":"2014-07-02T12:18:13","modified_gmt":"2014-07-02T16:18:13","slug":"may-industrial-production-and-june-empire-state-index","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=230","title":{"rendered":"May Industrial Production and June Empire State Index"},"content":{"rendered":"

KEY DATA:<\/strong> IP: +0.6%; Manufacturing: +0.6%\/Empire State: +0.2 point; Orders: +8 points<\/p>\n

IN A NUTSHELL:<\/strong>\u00c2\u00a0\u00e2\u20ac\u0153With manufacturing accelerating, there is every good reason to believe that the economy is beginning to hit its stride.\u00e2\u20ac\u009d <\/em><\/strong><\/p>\n

WHAT IT MEANS:<\/strong>\u00c2\u00a0So much for the winter.\u00c2\u00a0 Spring is just about gone and summer holds great hope that we will see consistently solid if not strong growth.\u00c2\u00a0 Why am I so optimistic?\u00c2\u00a0 The nation\u00e2\u20ac\u2122s manufacturing sector is accelerating.\u00c2\u00a0 Output soared in May the third month out of the last four where production rose robustly. <\/em><\/strong>\u00c2\u00a0Indeed, so far this quarter, manufacturing production has expanded at a 4.7% annualized pace and that does not assume any increase in June.\u00c2\u00a0 The winter collapsed activity in January and the sector has made strong progress since.\u00c2\u00a0 Most of the rise in manufacturing output was in the durable goods segment with vehicles, furniture, aerospace, electrical equipment and appliances as well as computers and electronic products all posting robust gains.<\/em><\/strong>\u00c2\u00a0 In addition, while most nondurable goods manufacturers slowed production, there were big gains in plastics, chemicals and petroleum products<\/em><\/strong>.\u00c2\u00a0 In other words, only nondurable consumer good firms showed weakness.\u00c2\u00a0 Capacity utilization hit its highest level in over six years, but in a global economy, this measure has relatively modest value.<\/p>\n

Supporting the view that manufacturing is booming was the gain in the June Empire State Index<\/em><\/strong>, which is produced by the New York Fed.\u00c2\u00a0 This measure of manufacturing activity rose modestly but there was a sharp increase in new orders.\u00c2\u00a0 Hiring slowed a bit.\u00c2\u00a0 While optimism faded a touch, it is still at a solid level.<\/p>\n

MARKETS AND FED POLICY IMPLICATIONS:<\/strong> \u00c2\u00a0If the Fed is looking for signs that growth is picking up, all it has to do is look at its own data.\u00c2\u00a0 Manufacturing production is soaring and the improvement in the June New York Fed\u00e2\u20ac\u2122s report point to the gains being sustained.<\/em><\/strong>\u00c2\u00a0 Production is rising for big-ticket consumer goods such as furniture and motor vehicles, business equipment and products, such as chemicals and plastics that go into the production of other goods.\u00c2\u00a0 The likelihood that manufacturing would be growing at an accelerating pace but the economy expanding weakly, is not particularly great.\u00c2\u00a0 It really looks like second quarter GDP could be up by more than 4%. <\/em><\/strong>\u00c2\u00a0But it would take strong third and fourth quarter growth rates to put to rest the view that we are in a new world where growth meanders along at a 2% to 2.5% pace.\u00c2\u00a0 I expect that to happen, but I am in a minority, at least right now.\u00c2\u00a0 Though investors should love these numbers, the chaos in Iraq and the uncertainty in the energy markets could overshadow everything else.<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: IP: +0.6%; Manufacturing: +0.6%\/Empire State: +0.2 point; Orders: +8 points IN A NUTSHELL:\u00c2\u00a0\u00e2\u20ac\u0153With manufacturing accelerating, there is every good reason to believe that the economy is beginning to hit its stride.\u00e2\u20ac\u009d WHAT IT MEANS:\u00c2\u00a0So much for the winter.\u00c2\u00a0 Spring is just about gone and summer holds great hope that we will see consistently … Continue reading May Industrial Production and June Empire State Index<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,17,16],"tags":[],"class_list":["post-230","post","type-post","status-publish","format-standard","hentry","category-economic-indicators","category-empire-state-index","category-industrial-production"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/230","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\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=230"}],"version-history":[{"count":2,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/230\/revisions"}],"predecessor-version":[{"id":239,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/230\/revisions\/239"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=230"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=230"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=230"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}