10222020Thu
Last updateThu, 22 Oct 2020 5pm

U.S. Added 661,000 Jobs in September

Total nonfarm payroll employment rose by 661,000 in September, and the unemployment rate declined to 7.9%, the U.S. Department of Labor reports. These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the COVID-19 pandemic and efforts to contain it. In September, notable job gains occurred in leisure and hospitality, in retail trade, in health care and social assistance, and in professional and business services.

Manufacturing added 66,000 jobs over the month. Durable goods accounted for about two-thirds of the gain, led by motor vehicles and parts (+14,000) and machinery (+14,000). Despite gains over the past 5 months, employment in manufacturing is 647,000 below February's level.


Texas Manufacturing Recovery Picks Up Steam

Texas factory activity expanded in September for the fourth month in a row following a record contraction due to the COVID-19 pandemic, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose nine points to 22.3, its highest reading in two years. Perceptions of broader business conditions continued to improve in September.

Other measures of manufacturing activity point to above-average growth this month. The new orders index advanced five points to 14.7, and the growth rate of orders index held fairly steady at 13.2. The capacity utilization index rose from 10.9 to 17.5, while the shipments index was largely unchanged at 21.5.

U.S. Manufacturing Edged Higher in August

Manufacturers indicated the fastest improvement in operating conditions since January 2019 in September, as highlighted by the IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) posting 53.5, up from 53.1 in August. The expansion was solid overall, signaling a further recovery from April’s nadir.

The overall upturn was supported by a faster rise in production at manufacturers, with a further increase in new orders and the resumption of operations at clients helping drive growth. New business rose at a solid pace that was broadly similar to August’s 19-month high.

The expansion in new export orders slowed, however, and was only marginal overall. At the same time, output charges rose at the fastest rate since January 2019, as firms partially passed higher costs on to clients following sustained growth in demand.

Durable Goods Orders Up 0.4% in August

New orders for manufactured durable goods in August increased $1.0 billion or 0.4% to $232.8 billion, the U.S. Department of Commerce announced. This increase, up four consecutive months, followed an 11.7% July increase. Excluding transportation, new orders increased 0.4%. Excluding defense, new orders increased 0.7%. Machinery, also up four consecutive months, led the increase, $0.5 billion or 1.5% to $31.2 billion.

Mid-America Business Conditions at Two-Year High

The August Creighton University Mid-America Business Conditions Index advanced above growth neutral, and to its highest level in two years. After falling below growth neutral for three straight months, the overall index bounced into positive territory for June, July, and August.

“While the August reading was certainly encouraging, manufacturing activity in the region remains below pre-COVID-19 levels. Creighton’s regional index has been mirroring the national ISM index with reading above growth neutral for June and July. I expect the national number to be above growth neutral for August when it is released later this morning,” said Ernie Goss, PhD, director of Creighton University’s Economic Forecasting Group.

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