Last updateFri, 16 Aug 2019 8pm

U.S. Economy Grew 3.1% in First Quarter

Real gross domestic product (GDP) increased at an annual rate of 3.1% in the first quarter of 2019, according to the most recent estimate released by the Commerce Department. In the fourth quarter, real GDP increased 2.2%.

Initially, the increase in real GDP in the first quarter was 3.2%. This new estimate reflects downward revisions to nonresidential fixed investment and private inventory investment and upward revisions to exports and personal consumption expenditures. Imports, which are a subtraction in the calculation of GDP, were revised up; the general picture of economic growth remains the same.

Consumer Confidence Up Again This Month

The Conference Board Consumer Confidence Index improved in May, following an increase in April. The Index now stands at 134.1, up from 129.2 in April. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – increased from 169.0 to 175.2. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – increased from 102.7 last month to 106.6 this month.

“Consumer Confidence posted another gain in May and is now back to levels seen last Fall when the Index was hovering near 18-year highs,” said Lynn Franco, Senior director of economic indicators at The Conference Board. Consumers’ sentiment regarding their income prospects was mixed.

Texas Manufacturing Expansion Pace Slows

Texas factory activity continued to expand in May, albeit at a slower pace, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell six points to 6.3, indicating output growth decelerated from April.

Most other measures of manufacturing activity also suggested slower expansion in May. The survey’s demand indicators fell but remained positive: The new orders index slipped seven points to 2.4, and the growth rate of orders index moved down from 5.2 to 1.1. The capacity utilization index fell to 7.7 from a seven-month high of 15.6 in April. Meanwhile, the shipments index edged up to 7.6.

Durable Goods Orders Down 2.1% in April

New orders for manufactured durable goods in April decreased $5.4 billion or 2.1% to $248.4 billion, the U.S. Department of Commerce announced. This decrease, down two of the last three months, followed a 1.7% March increase. Excluding transportation, new orders were virtually unchanged. Excluding defense, new orders decreased 2.5%. Transportation equipment, also down two of the last three months, drove the decrease, $5.4 billion or 5.9% to $85.4 billion.

U.S. Manufacturing Growth at Nine-Year Low

U.S. manufacturers indicated a slower expansion in output in May amid further signs of relatively subdued demand conditions. The seasonally adjusted IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) registered 50.6 in May, down from 52.6 in April. Although the index reading continued to signal an improvement in operating conditions across the manufacturing sector, the upturn was the least marked since September 2009 and only marginal. Underlying data indicated a broad-based slowdown in the rates of expansion for output, employment and pre-production inventories, while new orders declined for the first time since August 2009.

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