08172018Fri
Last updateFri, 17 Aug 2018 5pm

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U.S. Manufacturing Output Rose 0.3% in July

Industrial production edged up 0.1% in July after rising at an average pace of 0.5% over the previous five months. At 108.0% of its 2012 average, total industrial production was 4.2% higher in July than it was a year earlier. Capacity utilization for the industrial sector was unchanged in July at 78.1%, a rate that is 1.7% below its long-run (1972–2017) average.

Manufacturing output increased 0.3% in July and was 2.8% higher than its year-earlier level. The index for durables rose 0.4%. Within durables, most major industry groups posted increases. 


Manufacturers Technology Orders Ahead of 2017 Pace

Manufacturing technology orders capped the first half of the year with another strong month in June, gaining 5% compared to June 2017 and bringing the annual growth rate to 22% for 2018. The latest  U.S. Manufacturing Technology Orders Report from The Association For Manufacturing Technology showed that orders totaled $417 million for the month, down 14% compared to May’s totals, and sit at $2.55 billion for the year. The only region to show month over month growth was the Northeast, where power generation and aerospace showed great strength in June. 

Texas Economy Likely to Cool in Second Half

Texas has added jobs at a “blistering” pace through the first six months of 2018, but there may be a slight cooldown ahead, according to the Federal Reserve Bank of Dallas’ latest Texas Economic Update.

“After red-hot gains in the first of the year, the Texas economy will likely cool in the second half due to a historically tight labor market and a slowing in export growth,” said Dallas Fed Senior Business Economist Laila Assanie in a video accompanying the release. “Additionally, Houston’s growth—which makes up 25% of the state’s employment—will likely cool in the second half as Hurricane Harvey-induced activity dissipates. Despite the cooling, Texas will still see solid and above-trend job growth in the second half.” 

Global Trade Likely to Slow in Third Quarter

Trade expansion will likely slow further in the third quarter of 2018 according to the WTO’s latest World Trade Outlook Indicator (WTOI). The most recent WTOI reading of 100.3 is below the previous value of 101.8 and just above the baseline value of 100 for the index, signaling an easing of trade growth in the coming months in line with medium-term trends. This loss of momentum reflects weakness in component indices including export orders and automobile production and sales, which may be responding to the ratcheting up of trade tensions. 

U.S. Economy Appears Well-Positioned for Second Half

The U.S. economy entered its 10th year of economic expansion last month, and recent data point to continued economic growth for the second half of the year. According to Laton Russell of the Dallas Federal Reserve, robust consumer spending, above-trend labor force growth, and elevated business and consumer sentiment support above-potential growth through the rest of 2018. Inflation measures remain at or just below the Federal Reserve’s 2% target, and long-run inflation expectations are little changed. 

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