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):

MfgShipmentsAndOrders0114to0417

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.

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