December 2015 Economic Indicators
Melanie Garza - Director of Strategy & Growth
Manufacturing Hit Hard
The manufacturing sector hit a three-year low in November as the PMI index fell below 50 according to the Manufacturing ISM Report on Business. The November reading was 48.9 falling from 50.1 in October. A rate of 50 or above signifies that industrial production is growing.
Over the last 36 months it has remained above 50, but has declined steadily over the last several months down to 50.1 in October. In December 2014, the index measured 55.1.
The New Orders Index fell 4.0% to 48.9 as well as the Production Index at 49.2 dropping 3.7% from October. The Employment Index showed positive growth of 3.7% to 51.3.
The five industries reporting growth in new orders in November are: Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Chemical Products; and Primary Metals. The eight industries reporting a decrease in new orders during November — listed in order — are: Apparel, Leather & Allied Products; Paper Products; Plastics & Rubber Products; Machinery; Furniture & Related Products; Transportation Equipment; Fabricated Metal Products; and Computer & Electronic Products.
Consumer Sentiment Rises Slightly
Consumer Sentiment rose slightly in December over November from 91.3 to 91.8, but fell slightly below market expectations, according to the University of Michigan’s Survey of Consumers. The year started with a peak at 98.1 in January and has fluctuated over the course of the year with the average reading at 92.9.
The University of Michigan reported that all of the early December gain was recorded among households with incomes in the bottom two-thirds (+2.7%), while the Sentiment Index among consumers with incomes in the top third declined (-4.4%).
The survey recorded persistent strength in personal finances and buying plans, while the largest loss was in how consumers judged prospects for the national economy during the year ahead. The data continues to indicate that real consumer expenditures will grow by 2.8% in 2016 over 2015.
Questions or comments? Please contact Melanie Garza at mgarza@teamCOACT.com.