October 2013 Economic Indicators

Melanie Garza - Director of Operations

Manufacturing Grows Before the Shutdown

Despite the news of the impending government shutdown, manufacturing showed strong signs of growth in September.  On October 1 while the government shutdown for the first time in 17 years, the Institute for Supply Management reported the Manufacturing index climbed to its highest level since April 2011. The index rose to 56.2 over the August reading at 55.7.  According to the ISM, readings over 50 imply growth.

This is the fourth straight month of growth for factories signaling a stronger economy.  Nearly two thirds of the manufacturing industries reported growth including the following as listed in order of growth: electrical equipment, appliances, food, furniture, petroleum, fabricated metal, transportation, machinery, computers and plastics.

Economists are predicting continued growth; however, problems in Washington may slow down the acceleration.

ISM Manufacturing: PMI Composite Index (NAPM)

PPI Indicates Growing Demand for Goods

While the manufacturing sector is growing as noted by the ISM Manufacturing Index, the Producer Price Index (PPI) shows the changes in selling prices of goods and services are also rising. The U.S. Department of Labor reported the prices paid to producers grew 0.3% in August. The September index will be released on October 11.

The PPI monitors changes in prices finished, intermediate and crude goods. Often seen as one of the first indicators of inflation, the PPI has fluctuated moderately throughout most of 2013; however it is reaching a new high of 205. Economists had forecast just a 0.2% increase in August, while July remained unchanged from June.

Producer Price Index: All Commodities (PPIACO)

Questions? Please contact Melanie Garza at mgarza@teamCOACT.com