Posts for October 18, 2010

October 18, 2010

Momentum improved slightly on economic front last week. Six of the eight major indicators grew, while just two declined. Note: Four of the six improving indicators -- the Organization for Economic Cooperation and Development's (OECD) composite leading indicators (CLI), retail sales, consumer prices and business inventories -- grew at a slower pace than in the prior month. (To see all of last week's reports, see the Latest Economic Reports section below.)

While the trade deficit widened in August, due to higher imports of consumer goods as well as a sharp deceleration in exports, the fundamentals still suggest that the trade picture should continue to be a bright spot for the economy in the second half of the year.

First, most of the slowdown in export growth in August was due to a sharp contraction in exports of civilian aircraft, which are extremely volatile from month to month. Outside of aircraft, exports in most categories improved in August. For the first two months of the third quarter, exports of goods rose at an annual rate of nearly 11 percent (see green bars in chart above).

Second, global demand remains solid. As the blue line in the chart shows, the OECD's CLI remained well above its long term average of 100 in August, signaling that the global recovery should remain intact in the second half of the year.

The domestic economy is stuck in low gear, due in part to a continued weak labor market. Because nearly a quarter of U.S. manufacturing production is shipped abroad, more robust growth abroad, particularly in South/Central America and Asia, should keep U.S. exporters -- and manufacturers by extention -- growing faster than the rest of the economy.

Dave Huether

Chief Economist

National Association of Manufacturers

INDUSTRIAL PRODUCTION FALLS 0.2 PERCENT IN SEPT.

Today in Manufacturing.net
Industrial production fell in September for the first time since June 2009, and weak consumer demand led factories to pull back for the second time in four months ... continue

ADVANCING U.S. MANUFACTURING

Quick Manufacturing News
"Manufacturers need to quit trying to tech their way to prosperity..." Click to continue

UMA MEMBER COMPANIES IN THE NEWS:

NATURE'S SUNSHINE PRODUCTS ANNOUNCES BOARD CHANGE
Business Wire
PROVO, Utah - Nature's Sunshine Products, Inc., a manufacturer and marketer of nutritional supplements and complementary products, today announced the resignation of Pauline Hughes Francis from its Board of Directors.
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BHP, RIO TINTO SCRAP $120B IRON ORE VENTURE
Today in Manufacturing. net
Rio Tinto and BHP Billiton scrapped plans for a $120 billion iron ore joint venture after antitrust regulators in Australia, Europe and Asia opposed it or demanded changes ... continue