August 22, 2016

This Week’s Top Economic Data Points: Aluminum, Steel Shipments Continue To Decline

  • According to the Metals Service Center Institute, the rate of decline of shipments from 2015 levels accelerated again in both the United States and Canada in July. Inventory levels decreased in response to lagging shipments. In July 2016, U.S. service center steel shipments decreased by 15.2 percent from July 2015 while steel product inventories fell 14.5 percent. U.S. service center shipments of aluminum products declined 14.8 percent year-over-year while inventories of aluminum products fell 1.3 percent. In July 2016, Canadian service center shipments of steel products decreased by 14.9 percent from July 2015 while steel product inventories were down 25.6 percent. Canadian service center aluminum shipments in July fell 25.1 percent while inventories of aluminum products decreased 16.3 percent.
  • Industrial production in the United States rose 0.7 percent from June to July, the largest monthly jump since November 2014. Manufacturing output increased 0.5 percent, its largest gain since July 2015, while utilities output rose 2.1 percent and mining production improved 0.7 percent.
  • Canadian manufacturing sales rose 0.8 percent from May to hit $50.2 billion in June. Improved sales for machinery (a 5.8 percent increase) and transportation equipment (up 1.4 percent) were the main factors that drove the increase. Inventories, meanwhile, were down 0.2 percent in June while unfilled orders were up 1.6 percent.
  • Regional manufacturing readings in the United States this month have so far been mixed The Philadelphia Federal Reserve announced last week that its index rose to +2 in August from -3 in August. Despite the slight uptick, the index for new orders fell to -7.2 from +11.8 and readings for employment, unfilled orders, inventories, and delivery times were also down. Shipments rose slightly, from +6.3 to +8.4. The New York Federal Reserve, meanwhile, announced its manufacturing index fell to -4.2 in August from +0.8 in July. Shipments improved, but the new orders, employment, and prices paid indices remained weak.
  • The Conference Board’s Leading Economic Index for the United States increased 0.4 percent in July to 124.3. Conference Board Director of Business Cycles and Growth Research Ataman Ozyildirim said, “The U.S. LEI picked up again in July, suggesting moderate economic growth should continue through the end of 2016. There may even be some moderate upside growth potential if recent improvements in manufacturing and construction are sustained, and average consumer expectations don’t deteriorate further.”
  • According to the U.S. Labor Department, the number of individuals who filed for federal unemployment benefits fell to 262,000 for the week that ended Aug. 13 from 266,000 the week before. The four-week moving average of first-time claims increased, however, as did the number of individuals who continued to file for benefits. That latter figure rose to 2.175 million for the week that ended Aug. 6 from 2.16 million the week before. The four-week average of continuing claims rose, to 2.155 million from 2.144 million the week before. The Labor Department also announced last week that 15 states added jobs in July and that Kansas lost jobs. (Employment was essentially changed in the remaining 34 states.) Jobless rates rose significantly in seven states, fell significantly in three, and were stable in the remaining 40.
  • In other economic news: the number of new homes under construction in the United States increased 2.1 percent from June 2015 to July 2016 and 5.6 percent from July 2015 to July 2016; the U.S. consumer price index was unchanged from June to July, but was up 0.8 percent year-over-year; and real average hourly earnings in the United States rose 0.4 percent from June to July.