- Manufacturing employment rose by 17,000 in September, extending the gain of 11,000 in August and the fastest monthly increase since October 2022. Manufacturing growth has been more sluggish this year, adding just 37,000 workers through the first three quarters of 2023.
- More importantly, there were 13,011,000 manufacturing workers in September, the most since November 2008. As such, total manufacturing employment has remained resilient despite a challenging economic environment in the sector.
- Nonfarm payroll employment rose by a strong 336,000 in September, with the U.S. economy adding 2,339,000 workers year to date. The unemployment rate was unchanged at 3.8% in September, and the labor force participation rate remained 62.8%.
- Meanwhile, there were 616,000 manufacturing job openings in August, with postings remaining well above pre-pandemic levels despite cooling over the past year. In the larger economy, there were 9,610,000 job openings in August. For every 1.5 job openings in the economy, there was essentially just one unemployed worker.
- While manufacturers continued to remain challenged overall, with activity contracting for the 11th straight month, there were also encouraging signs of stabilization in the latest ISM® Manufacturing Purchasing Managers’ Index.® The headline index rose for the third consecutive month from 47.6 in August to 49.0 in September, the highest reading since August 2022.
- After dropping by 2.1% in July, new orders for manufactured goods rebounded somewhat, increasing 1.2% in August. Excluding transportation equipment, new factory orders jumped 1.4%, expanding for the third straight month to a new record high. Through the first eight months of 2023, factory orders excluding transportation have increased 1.0%, with activity trending higher over the summer months.
- Likewise, new orders for core capital goods—a proxy for capital spending in the U.S. economy—rose 0.9% to a record $73.95 billion in August, with 0.4% growth year-over-year and 1.3% growth year to date.
- Private manufacturing construction rose 1.2% to $197.95 billion in August. This was just shy of the record high in May, which was $199.73 billion. Private construction in the sector has trended sharply higher since bottoming out at $72.71 billion in September 2000. Over the past 12 months, activity has risen a whopping 65.9%.
- The U.S. trade deficit decreased to $58.30 billion in August, the lowest since June 2020, with goods exports rising and goods imports declining. In addition, the service-sector trade surplus rose to $26.17 billion, the highest since March 2018.
- This week, there will be a lot of focus on inflationary trends, with updates on consumer and producer prices. Financial markets have been keenly following these data. Yields on 10-year Treasury bills rose to rates not seen since 2007, and 30-year fixed-rate mortgages were at the highest rates since 2000 last week.
- In many ways, the bond market is doing the job of the Federal Reserve. As such, the next Federal Open Market Committee meeting, which is Oct. 31 – Nov. 1, will need to digest divergent trends in the economy. While the expectation has been for a 25-basis-point hike at that meeting, higher yields might already be putting some strain on economic activity, perhaps nudging the FOMC to hit the pause button one more time.
|
|
|
|
