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Last updateWed, 31 Aug 2016 3pm

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U.S. Consumer Confidence at 11-Month High

The Conference Board Consumer Confidence Index, which had decreased slightly in July, increased in August. The Index now stands at 101.1, compared to 96.7 in July. Consumers’ appraisal of current conditions improved in August. Those stating business conditions are “good” increased from 27.3% to 30.0%, while those saying business conditions are “bad” remained virtually unchanged at 18.4%. Consumers’ assessment of the labor market was also more favorable.

“Consumer confidence improved in August to its highest level in nearly a year, after a marginal decline in July,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of both current business and labor market conditions was considerably more favorable than last month. Short-term expectations regarding business and employment conditions, as well as personal income prospects, also improved, suggesting the possibility of a moderate pick-up in growth in the coming months.” 


Advanced Manufacturing Outpaces Rest of Production Sector

A new report from the Brookings Institution finds that high-tech advanced manufacturing bucked both global economic challenges and the longstanding shrinking of the traditional manufacturing sector over the last two years. While job losses were felt in other pockets of the production sector, advanced manufacturing continued to increase its output and add jobs. Even though growth slowed slightly from the pace of the 2010–2013 period, advanced manufacturing industries added more than 132,000 jobs during the 2013–2015 period, fully 20% of all advanced-sector employment growth. 

Texas Manufacturing Activity Increased in August

Texas factory activity increased in August, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, came in at 4.5 after a near-zero reading in July, suggesting output picked up this month.

Other measures of current manufacturing activity also reflected expansion. Demand bounced back, with the new orders index rising from -8.0 to 5.3 in August and the growth rate of orders index pushing up to 2.1, its first positive reading in nearly two years. The capacity utilization index remained only barely positive at 0.9, while the shipments index rose nearly 10 points to 9.9, with nearly a third of manufacturers reporting higher volumes of shipments this month.

Perceptions of broader business conditions remained fairly pessimistic. The general business activity index was negative for a 20th month in a row and moved down from -1.3 to -6.2. The company outlook index was largely unchanged at -2.8. 

Why Some Manufacturers Are Returning to the U.S.

According to The Reshoring Initiative, “between 2009 and 2016 more than 250,000 jobs were created or brought to the U.S. from other countries,” PBS NewsHour reports.

“A number of factors have influenced the creation of jobs in the U.S., including rising labor costs overseas, higher freight costs, low energy costs in America, and federal and state incentives. But while closed factories continue to reopen, critics argue that without government policies that help improve our skilled workforce, tax reform, and renegotiation of trade deals, the U.S. will continue to feel the effects of the millions of manufacturing jobs that were lost in the 2000s.” 

Manufacturing Productivity in U.S. Higher Than Other Nations

“U.S. productivity unexpectedly declined for a third straight quarter in the three months through June, Labor Department figures showed. On a year-over-year basis, it fell for the first time since 2013,” Bloomberg reports.

But on a more positive note, “the U.S. still blows other nations out of the water, at least in terms of manufacturing productivity by both foreign and domestic firms, according to data compiled by the Boston Consulting Group.” 

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