Monday Economic Report - Essential Takes on Leading Economic Indicators
Monday, December 17, 2018
Posted by: Alyce Ryan
Manufacturing Job Openings Reach Another All-Time High
AICC, through its membership in the Council of Manufacturing Associations, is pleased to present the "Monday Economic Report ” from the NATIONAL ASSOCIATION OF MANUFACTURERS (NAM).
The Weekly Toplines:
- Job openings in the manufacturing sector jumped to a new all-time high, rising from 485,000 in September to 522,000 in October. In addition, there was net hiring among manufacturers of 39,000 in October, the fastest month pace in 14 months. Overall, this is another solid reading for manufacturing job growth, consistent with the strong outlook and a tight labor market.
- Indeed, manufacturers continue to report the difficulties in finding talent as their top concern. For the eighth consecutive month, there were more job openings in the U.S. economy (7,079,000 in October) than the number of people looking for work (6,075,000 in October and 5,975,000 in November). In addition, the number of nonfarm payroll job openings was not far from the all-time high (7,293,000) set in August.
- With that said, there were several readings last week suggesting that manufacturing activity had slowed more recently. For instance, the IHS Markit Flash U.S. Manufacturing PMI®grew at the weakest pace in 13 months. Encouragingly, manufacturers completing the survey remained upbeat about production over the next six months, even with some easing in sentiment over the past few months.
- Manufacturing production was flat in November, with output in the sector slowing over the past few months. On a year-over-year basis, manufacturing production has risen a modest 2.0 percent. In addition, manufacturing capacity utilization edged down to 75.7 percent in November but remains not far from September’s pace (76.0 percent), which was the best rate since August 2015.
- Meanwhile, total industrial production rose 0.6 percent in November, bouncing back from the decline of 0.2 percent in October, on robust growth in mining and utilities output. Over the past 12 months, industrial production has risen 3.9 percent—a solid reading—and total capacity utilization increased to 78.5 percent, equaling the level in August, which was the highest since January 2015.
- Consumer and producer prices slowed in November, pulled lower by reduced energy costs. Both measures reflected some stabilization from more-accelerated paces midyear, even as pricing pressures remained above rates that Americans have become accustomed to in recent years.
- Retail sales softened in November, up 0.2 percent, with reduced gasoline station sales (and lower prices) serving as a bit of a drag on the headline number. Despite the smaller increase for the month, consumer spending remained strong overall, continuing to be one of the bright spots in the U.S. economy. Over the past 12 months, retail sales have risen by a relatively healthy 4.2 percent.
- On a year-over-year basis, the clear winner was nonstore retailers, with retail sales growth of 10.8 percent since November 2017. In contrast, department store sales decreased 0.2 percent year-over-year. As such, the brick-and-mortar versus online retail dynamics continued to play out in the sales data.