Last updateThu, 22 Oct 2020 5pm

Consumer Confidence Up, Still Below Pre-Pandemic Levels

The Conference Board Consumer Confidence Index increased in June, after virtually no change in May. The Index now stands at 98.1 (1985=100), up from 85.9 in May. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – improved from 68.4 to 86.2. The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – increased from 97.6 in May to 106.0 this month.

ISM: Manufacturing Makes Comeback in June

The June PMI registered 52.6%, up 9.5% from the May reading of 43.1%. This figure indicates expansion in the overall economy for the second straight month after April’s contraction, which ended a period of 131 consecutive months of growth.

“June signifies manufacturing entering an expected expansion cycle after the disruption caused by the COVID-19 pandemic. Comments from the panel were positive (1.3 positive comments for every one cautious comment), reversing the cautious trend which began in March. The manufacturing sector is reversing the heavy contraction of April, with the PMI increasing month-over-month at a rate not seen since August 1980, with several other indexes also posting gains not seen in modern times,” says Timothy R. Fiore, chair of the Institute for Supply Management (ISM) manufacturing business survey committee.

U.S. Added 4.8 Million Jobs in June

Total nonfarm payroll employment rose by 4.8 million in June, and the unemployment rate declined to 11.1%, the U.S. Department of Labor reported. These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed in March and April due to the COVID-19 pandemic and efforts to contain it. Manufacturing employment rose by 356,000 but is down by 757,000 since February.

USMCA Free Trade Agreement Goes into Effect

Today, July 1, 2020, the United States Mexico Canada Agreement (USMCA) officially went into effect. The USMCA replaces the North American Free Trade Agreement (NAFTA).

The federal government also chose members of the Rapid Response Labor Mechanism, which enforces USMCA labor protections.

“The United States, Mexico and Canada must continue working together to ensure that the USMCA is implemented in a way that will bolster that recovery and renewal and maintain broad support for open, rules-based North American trade—this year, next year and well into the future. The stakes have never been higher,” said NAM president Jay Timmons in a statement

Texas Manufacturing Regains Footing After Epic Decline

Texas factory activity rebounded strongly in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, climbed from -28.0 to 13.6, indicating moderate expansion in output following three months of record or near-record declines. Perceptions of broader business conditions were mixed in June.

Other measures of manufacturing activity also pointed to a rebound in growth this month. The new orders index advanced 34 points to 2.9, its first positive reading in four months, with nearly a third of manufacturers noting an increase in orders. The growth rate of orders index pushed up 25 points but remained negative at -5.8. The capacity utilization and shipments indexes also returned to positive territory.

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