July 2017 – Economic Indicators
Melanie Garza - Director of Strategy & Growth
ISM Reports a Healthy June for Manufacturing
The Institute for Supply Management posted a healthy outlook on the Manufacturing sector in June with its PMI index. The June report showed new orders, production, backlog and employment growing in June.
The June PMI® registered 57.8 percent, which is an increase of 2.9% from the May reading of 54.9%, with all indexes climbing according to the Institute of Supply Management.
The New Orders Index registered 63.5%, an increase of 4% from the May reading of 59.5%. The Production Index registered 62.4%, a 5.3% increase compared to the May reading of 57.1%. The Employment Index posted at 57.2%, an increase of 3.7% from the May reading of 53.5%. The Supplier Deliveries index registered 57%, a 3.9% increase from the May reading of 53.1%. The Inventories Index was 49%, a decrease of 2.5% from the May reading of 51.5%. The Prices Index registered 55% in June, a decrease of 5.5% from the May reading of 60.5%, indicating higher raw materials’ prices for the 16th consecutive month.
Of the 18 manufacturing industries, 15 reported growth in June in the following order: Furniture & Related Products; Nonmetallic Mineral Products; Paper Products; Machinery; Electrical Equipment, Appliances & Components; Chemical Products; Transportation Equipment; Computer & Electronic Products; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Printing & Related Support Activities; Fabricated Metal Products; Wood Products; Miscellaneous Manufacturing; and Petroleum & Coal Products.
Impressive Gain in Service Jobs; Others Reflect Little Change
The U.S. Bureau of Labor Statistics released an impressive jobs report for June which exceeded expectations. Total nonfarm payroll employment increased by 222,000 in June, and the unemployment rate was little changed at 4.4%. Employment growth has averaged 180,000 per month thus far this year, in line with the average monthly gain of 187,000 in 2016.
Employment rose in healthcare up 37,000; social assistance added 23,000; and financial activities up 17,000 and mining. Employment in professional and business services continued to trend up in June (+35,000) and has grown by 624,000 over the last 12 months.
Employment in other major industries—including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and government—showed little change over the month.
The labor force participation rate, at 62.8 percent, changed little in June and has shown no clear trends over the past year.
Questions or comments? Please contact Melanie Garza at mgarza@teamCOACT.com