June 6, 2017

Manufacturing Shipments and Orders Update; First Quarter Strong, April Not So Much

Filed under: Economy,Taxes & Government — Tom @ 10:02 am

I haven’t visited the manufacturing segment at a detail level in a while.

Here’s the detail (orders; shipments; April’s monthly report released yesterday):


There’s been an obvious turnaround in the past six months from year-over-year decreases or flatness to significant increases. First-quarter orders and shipments (seasonally adjusted) were both over 5 percent ahead of the first quarter of 2016, and also were both over 1.5 percent ahead of the fourth quarter (i.e., over 6 percent annualized). That’s good.

It also may indicate further upside for the final revision to 1Q16 GDP when it’s announced near the end of this month.

What’s not so good is April, where the year-over-year differences, especially in the raw data, narrowed considerably (this also happened to an extent in February, but that may have been mostly due to 2017 having one less business day than 2016). Each month in the first quarter of 2017 for both orders and shipments was ahead of 2015; April wasn’t.

This may be more evidence that consumer and business optimism can only get you so far without a more robust level of regulatory reforms and other significant economic improvement initiatives like repealing Obamacare and tax reform.

May 2017 ISM Non-Manufacturing: 56.9 Percent, Down From April’s 57.5 Percent

Filed under: Economy — Tom @ 9:35 am

From the Institute for Supply Management (bolds and most paragraphs breaks added by me):

Economic activity in the non-manufacturing sector grew in May for the 89th consecutive month, say the nation’s purchasing and supply executives in the latest Non- Manufacturing ISM® Report On Business®.

The NMI® registered 56.9 percent.

The Non-Manufacturing Business
Activity Index decreased to 60.7 percent, 1.7 percentage points
lower than the April reading of 62.4 percent, reflecting growth
for the 94th consecutive month, at a slower rate in May. The New Orders Index registered 57.7 percent, 5.5 percentage points lower than the reading of 63.2 percent in April.

The Employment Index increased 6.4 percentage points in May to 57.8 percent from the April reading of 51.4 percent. The Prices Index decreased 8.4 percentage points from the April reading of 57.6 percent to 49.2 percent. The majority of respondents’ comments continue to indicate optimism about business conditions and the overall economy. The 17 non-manufacturing industries reporting growth in May.

The New Orders Drop to a level still in the high-50s would be more of a problem if it weren’t for the fact that Backlog of Orders jumped from 53.5 percent to 57.0 percent in May. One could argue that expanding but not booming levels in both index elements is a good thing, and should reflect a more predictable pace of business.

Also worth noting: Respondents say that import and export activity slowed down in May. That may signal more in-country supplier and customer reliance, or it may be an indicator of a slowdown.

Tuesday Off-Topic (Moderated) Open Thread (060617)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

Positivity: Remembering D-Day — June 6, 1944

Filed under: Positivity,Taxes & Government,US & Allied Military — Tom @ 5:55 am

Civilization hung in the balance on June 6, 1944. Civilization won:

On June 6, 1944, 160,000 Allied troops landed along a 50-mile stretch of heavily-fortified French coastline to fight Nazi Germany on the beaches of Normandy, France. General Dwight D. Eisenhower called the operation a crusade in which “we will accept nothing less than full victory.” More than 5,000 ships and 13,000 aircraft supported the D-Day invasion, and by day’s end on June 6, the Allies gained a foot- hold in Normandy. The D-Day cost was high — more than 9,000 Allied Soldiers were killed or wounded — but more than 100,000 Soldiers began the march across Europe to defeat Hitler.

Here is a video from the Army with the accounts of some of the men who were actually there:

00:00:00 Erik M. Juleen – During those five days leading up to the invasion, why… we were mostly all prepared at that time — there wasn’t much to do except that, and um, we were ready to move out to a bidwack area. We were in this area and it was unbelievable. For myself it was the anxiety, the thing we were waiting for for a long time.

00:00:31 Joseph Dragotto – Over the loudspeaker, I heard the words “Attention!” I with the other troops, snapped to attention and in the corner of my eye, I could see two men — one wearing an American uniform, the other a British uniform. The American was General Eisenhower and the other was Field Marshall Montgomery. General Eisen said that we were about to embark on a great cause — the liberation of Europe. God be with you. Montgomery said almost the same thing but added that he was grateful for the help and supplies and troops from America.

00:01:10 Harlod Baumgarten – We left the martianry area with full battle equipment — about 100 pounds per man. The harbor of Weymuth was crowded with ships of every size, shape and description, most of them flying the stars and stripes. On the evening of June 5th the harbor came alive. I could see one ship signaling to the other that this was it. We would hit the beach the next morning at 6:30 AM, June 6th 1944, to be called “D-Day”.

00:01:43 Dragotto – Around 00, 01 hours June the 6th I heard the roar of the aircraft. I got up and looked out into the sky and I noticed airplanes and gliders behind them — 101st 82nd Airborne were being flown to be dropped out of the plane.

00:02:04 Juleen – I guess the morning — early, early morning — of June 6 why everything starts moving. Then we went up to our boat foreman, and we assembled with hundreds and hundreds of ships — I had never seen anything like it in my life. And then I guess we were on our way.

00:02:23 Baumgarten – Chaplain Kelly held the mass service on the deck of the Anvil in which he requested God to see us through the landing safely. We left the Anvil on British LCA, and huge bluish black waves rose high over the sides of our little craft, and battered the boat as well as us with unimaginable fury. It was as if the waves were trying to crush our soft boat and we in it. We were all soaking wet. I tried to keep my rifle dry but, I put my plastic cover over the rifle.

00:03:11 Adolph “Bud” Warnecke – We were so loaded down with equipment — every man had at least one anti-tank mine, and we had bundles in the doors, bundles under the aircraft, and the C-47 was loaded to the point where he could take off but he couldn’t land with it so he had to drop it. We had rendezvoused for quite a while to get the air Amanda into a formation. When we crossed the English Channel, I was standin’ in the door. We looked down, we looked out, looked down, and there was the most beautiful moonlight evening. Looked down and had never seen so many ships in all my life and probably will never see ‘em again. You coulda walked across the English Channel — not that you had to walk on water — you could just step from ship to ship — that is how it looked from the air.

00:04:20 Juleen – Its so hard to describe… it was massive, it was massive — I can imagine being a German lookin’ out through a binoculars and seeing all of this (laughing) no wonder Hitler didn’t believe us.

00:04:35 Baumgarten – The fury of the water broke our front ramp and the boat began to fill with icy channel water, but Lt. Donelson rammed his body against the unit door of the ship and said “Well what are you waiting for? Take off your helmets and start bailing the water out.”

00:04:54 Dragotto – As the landing craft inched closer to the beach shells began to explode around us. The craft next to us hit a mine and exploded.

00:05:06 Juleen – But as we were about to land they had huge obstacles in the water. Big railroad tracks cris-crossed and stickin’ up out of the water so nobody could get close.

00:05:22 Warnecke – Well there was a ground fog, we were supposed to be flying at about 600 feet — that was gonna be our jump altitude. We couldn’t see any landmarks, we couldn’t see where we were, where we were going or anything, but the order was before we left, that no one would come back in the aircraft whether we found our objective or DZs or not — we would go out somewhere over Normandy. Just as soon as I bailed out, I knew that was the end of it. I was not coming back anymore because I had never seen so many tracers in all my life. Tracers were all over the place and shooting at us. I’d hardly got the thoughts out of my mind when I went through an apple tree. My feet just barely touched the ground, the top of my canopy had caught my fall and I just hung there real nice — no problem. Took my knife, cut myself out of my harness, and immediately started to gather the people together that jumped from our aircraft.

00:06:40 Baumgarten – I saw the beach, with a huge seawall, at the foot of a massive 150 foot bluff. An 88 millimeter shell landed right in the middle of the LCA on the side of us, and splinters of the boat, equipment and bodies were thrown into the air. The ramp was lowered and the unit door was opened and a German machine gun trained on the opening and took a heavy toll of lives. I waded through the waist-deep water watching many of my buddies fall alongside of me. I expected a bullet to rip through me at any moment, from the right. I reached the stone wall. I looked down and being washed around by the incoming water. I saw the bodies of my buddies who had tried in vain to clear the beach.

00:07:33 Dragotto – When we hit the beach, I knelt down and kissed the dirt, whispered “Thank you God.” I then looked around and saw many dead in the water and on the beach. My company was being held up by machine gun fire from the hill then Col. Peynold regimental commander said “If we have to die, let’s die on the hill.” We moved on and took the hill, and given the Allies a foothold in France.