NAM Monday Economic Report – July 6, 2014
Last week’s payroll report showed that job growth is accelerating across most segments of the economy.
The nation’s trade deficit fell by $2.6 billion to $44.4 billion on stronger exports of motor vehicles and parts, consumer goods, industrial supplies and other goods. This will add to second-quarter GDP growth. Imports ticked lower as U.S. imports of petroleum eased. Increasing oil production from shale resources is displacing oil imports from other parts of the world.
For manufacturers, the Institute for Supply Management’s Purchasing Managers’ Index (PMI) continues to indicate expanding manufacturing activity for the 13th consecutive month. The PMI edged down to 55.3 percent as production increased at a slower rate during June. Orders accelerated and inventories continued to grow. From the Census Bureau, headline factory orders slipped in May with lower orders for civilian aircraft and defense goods. Orders for core business investment goods, however, were up by 0.5 percent and were ahead 3.6 percent compared to last year. Inventory growth outpaced shipments, and the inventories-to-shipments ratio edged higher, but overall inventories remain roughly balanced against sales.
The next week is relatively light for economic news, but some important indicators will be released, including new data on labor market turnover, consumer debt, wholesale inventories and small business optimism. The Organisation for Economic Co-operation and Development composite leading indicators will give us a forward look at economic conditions in other countries, including major trading partners. Data on chain store sales will also give a preview to the retail sales numbers for June that are expected later this month.
Martha Moore, Senior Director of Economics and Policy Analysis, American Chemistry Council
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