Manufacturers’ Outlook Down Due To Worries About Finding Workers
- Manufacturing optimism fell in the third quarter of 2019 in the latest National Association of Manufacturers’ Outlook Survey. For the second consecutive quarter, the survey showed a significant drop in manufacturers’ optimism amid uncertainties, a softening global economy and a worsening workforce shortage. Only 68 percent of manufacturers had a positive outlook for their business in the third quarter, down from 79.8 percent in the second quarter and 89.5 percent in the first. The inability to attract and retain a quality workforce remained manufacturers’ top business concern (69.9 percent) for the seventh straight quarter.
- The U.S. economy expanded at a two percent annualized rate in the second quarter of 2019, down from 3.1 percent during the first quarter. The U.S. Department of Commerce said the report reflected positive contributions from personal consumption expenditures, federal government spending and state and local government spending that were partly offset by negative contributions from private inventory investment, exports, nonresidential fixed investment and residential fixed investment. Meanwhile, the Federal Reserve Bank of Chicago’s National Activity Index, a key gauge of future economic growth, rose from -0.41 in July to +0.10 in August even though employment, consumption and inventories made negative contributions to the index. (Production-related indicators contributed positively.)
- The Federal Reserve Bank of Kansas City’s manufacturing index rose to -2 in September from -6 in August due to an uptick in the readings for new orders, production and shipments. Respondents to the bank’s survey were less optimistic about employment. One commenter said, “Human capital will continue to be an issue for the foreseeable future and into 2021.” Click here to read the full report. Meanwhile, the Federal Reserve Bank of Richmond’s manufacturing reading, which covers the Central Atlantic region, fell to -9 in September from +1 in August due to lower levels of shipments and new orders.
- According to the U.S. Department of Labor, 213,000 individuals filed for federal unemployment benefits during the week that ended September 21, an increase of 3,000 from the previous week. The four-week moving average of first-time claims was 212,000, a decrease of 750 from the previous week. The number of individuals who continued to receive benefits fell to 1.65 million for the week that ended September 14 from 1.665 million the week before. The four-week moving average of continuing claims also declined.
- In other economic news: personal income in the United States increased 0.4 percent from July 2019 to August 2019 while personal consumption rose 0.1 percent; the University of Michigan consumer sentiment reading rose to 93.2 in September from 89.9 in August while the Conference Board’s index of consumer confidence fell to 125.1 in September from 134.2 in August; and the number of new homes sold in the United States increased 7.1 percent between July 2019 and August 2019 and 18.0 percent between August 2018 and August 2019.