Business

Manufacturing Production Soared in December

Production at American factories boomed in December. Output at U.S. factories grew 1.1 percent last month, the Federal Reserve said Friday. Economists had expected industrial production to be flat to barely rising. Compared with a year ago, industrial production rose 4 percent in December. Vehicle production jumped 4.7 percent in the month, boosted by demand for light trucks. Compared with a year ago, vehicle production is up 7.8 percent. Construction supplies production rose 1.6 percent. Business equipment production was up 0.5 percent, which is a good indicator that U.S. businesses continued to invest in expansion despite the rocky performance of the stock market in December. For the year, this is up 5.0 percent. Factory output accounts for about 75 percent of overall industrial output, which rose 0.3 percent for the month. That was in line with the forecast. On an annual basis, total industrial production rose 4.0 percent, much higher than 2.9 percent in 2017 and 2016’s paltry 0.5 percent gain. Mining production rose 1.5 percent, a sharp and unexpected increase. Production at utilities fell 6.3 percent, likely because December was unseasonably warm in much of the country. Capacity utilization, which measures actual production against what factories could potentially produce, rose by 0.1 percent to 78.7 percent. Economists had predicted a slight decline. The jump in factory output indicates that tariffs on steel and aluminum are not weighing on the U.S. as much as critics claimed they would. And the new tariffs on Chinese products, combined with tax cuts, appear to be encouraging domestic manufacturers to expand production. The December industrial production numbers indicate that earlier anecdotal reports and surveys that suggested a manufacturing slowdown were offbase.

No kidding!  More great news in this Trump economy!       🙂

Prices Fell in December, Tariffs Are Not Pushing U.S. Prices Higher

Prices fell in December, indicating U.S. businesses are not passing on the costs of tariffs to consumers. The Labor Department said Wednesday that its Producer Price Index fell in December. Compared with the month, prices were down 0.2 percent. Economists had forecast a slight price gain for the month. The index for final demand goods–which are those most likely to translate into consumer prices–moved down 0.4 percent in December, the same as in November. Food prices rose. Absent food and energy, final demand prices rose 0.2 percent. One reason for the very tame inflation data is the steep drop in the price of oil. Absent the volatile food and energy categories, prices of goods fell just 0.1 percent. Gasoline prices fell 13.1 percent in December and overall final demand energy prices dropped 5.4 percent. Inflationary pressures have been easing. Producer prices advanced 0.1 percent in November and 0.6 percent in October. On an unadjusted basis, prices were up 2.5 percent compared with December 2017. That is a move down from the year-over-year price gain of 2.7 percent recorded in November and it matches what was recorded in December of last year. In other words, the December price gains were no higher than what was recorded before the Trump administration’s tariffs on steel, aluminum, and China imports were imposed. Price levels have held remarkably steady on most categories of goods in 2018, defying predictions that American households would be squeezed by tariffs on steel, aluminum, and around $250 billion of goods made in China. On Monday, China’s commerce ministry announced that it ran a trade surplus with the U.S. last year that was the highest on record. The U.S. collected around $8 billion in tariffs in the October through December period, around 83 percent more than the period a year prior. Price increases are more noticeable lower down in the production chain of materials and components that go into making final goods, although recent data show that rise has moderated or reversed. Steel mill products, for example, fell 0.6 percent for the month but were up 18.5 compared with a year ago. Prices of materials used in durables manufacturing—which are those most likely to be affected by the tariffs on steel and aluminum—fell 0.2 percent on a monthly basis, the third consecutive monthly declined.

Sears to Liquidate After Takeover Bid Falls Through

Sears Holdings Corp’s future is in doubt as the retailer is expected to request a judge for permission to liquidate its assets after a $4.4 billion takeover offer, spearheaded by its chairman Edward Lampert, fell through, according to Reuters. Plagued by falling sales and heavy debt, Sears filed for Chapter 11 bankruptcy reorganization in October and announced plans to close 142 of its roughly 700 remaining stores and eliminate thousands of jobs. The 126-year-old company, whose closure would be among the most high-profile retail bankruptcies in recent years, struggled to convince suppliers to keep shipping it merchandise by touting the $300 million in financing it has secured in November so that its business could operate through the holidays. CNBC reports: “Lampert had put forward a $4.4 billion bid to save Sears and 50,000 jobs by buying it out of bankruptcy through his hedge fund ESL Investments. His offer, though, was deemed insufficient by Sears’ advisors, the people said A liquidation could still salvage pieces of storied retailer, like its home services business. Still, it marks the end of an era for the company that started more than a century ago as Sears, Roebuck & Co., and was once nation’s largest retailer. Its fall from grace saw it swing from being the “first everything store” to a business that couldn’t compete when “everything” was found online after Amazon arrived.” Sears has been struggling for several years with bare shelves and displays. A visit to a store at Newport Centre Mall in Jersey City, New Jersey, a few days before the bankruptcy filing showed large areas on the selling floor that had no merchandising racks and bare wall displays. In various documents, Sears itself acknowledged the problem, previously noting more than 200 suppliers have stopped or refused to ship merchandise to the company in the two weeks heading into bankruptcy, further crippling its business. Sears has failed to post positive same-store sales results since 2010, according to Retail Metrics data.

Jobs Growth Explodes Higher, Adding 312,000 Jobs in December, Far More than Expected

Job creation boomed in December. U.S. economy added 312,000 jobs in December and the unemployment rate rose to 3.9 percent, according to data released Friday. Economists had expected nonfarm payrolls to rise by 176,000 and the unemployment to hold steady at 3.7 percent. The previous month was revised up as well. November, initially reported at a lower than expected 155,000 jobs gain, was revised up to 176,000. October’s gain went from 274,000 to 237,000. That adds up to a net gain of 58,000 from the previous tallies. The labor market has been one of the bulwarks of the economy, remaining strong even while financial markets have gone wobbly. Average hourly earnings rose 0.4 percent, more than the 0.3 percent expected. A month earlier, wages grew 0.2 percent. Compared with a year earlier, wages were up 3.2 percent, handily beating consumer price increases. The annual gain tied with October’s for the best since 2009. The average work week rose 0.1 hour to 34.5 hours. The rise in unemployment was due to nearly 400,000 Americans entering the workforce. The labor force participation rate rose by two-tenths of a percentage point. It’s likely that higher wages and plentiful jobs are luring people back into the workforce. The revival of American manufacturing continued in the final month of 2018. The economy added 32,000 factory jobs for the month, including 19,000 positions added in the durable goods sector. That brings total new manufacturing jobs to 284,000 in 2018, a 37 percent rise from the previous year. And it was a jolly season for retail, which added 24,000 jobs for the month. Compared to last year, retail employs 92,0-00 more jobs than a year ago. Construction jobs also came in strong, despite many fears about a slumping housing market. The industry added 38,000 jobs, lifting the annual total to 280,000, 12 percent higher than the prior year. Restaurants and bars decked the halls with new positions, adding 41,000. Health care was the strongest sector for the month, with 50,000 new jobs.

Great news!!  For more on how well we’re doing with manufacturing jobs, scroll down about three articles.    🙂

American Economy Added The Most Manufacturing Jobs in Over 20 years

Donald Trump has delivered on a key promise that many economists said was impossible: manufacturing jobs boomed in 2018. The manufacturing sector added 284,000 positions over 2018, its best year since 1997. The revival of American manufacturing was a cornerstone of Trump’s 2016 campaign promise to Make America Great Again. Many economists derided the idea that manufacturing could boom in the U.S., insisting that a combination of automation and globlization meant that factory jobs were gone for good. Some even accused Trump of attempting to “con” the American people with promises of manufacturing jobs. Perhaps the highest profile attack on Trump’s manufacturing jobs promise came from then-President Barack Obama. “Well, how exactly are you going to do that? What exactly are you going to do? There’s no answer to it,” Obama said. “He just says, ‘Well, I’m going to negotiate a better deal.’ Well, what, how exactly are you going to negotiate that? What magic wand do you have? And usually the answer is, he doesn’t have an answer.” Obama’s skepticism is perhaps understandable. On the campaign trail in 2012, Obama pledged to create 1 million manufacturing jobs in his second term. Instead, the U.S. economy added only 549,000 jobs in manufacturing over the following four years. In his final year in office, manufacturing employment actually contracted. For an administration staffed by people who regarded themselves as the smartest economics minds on the scene, the failure to revive manufacturing jobs likely made it seem like an impossible task. In fact, in Obama’s entire eight-year term, the economy never added as many manufacturing jobs as it did last year. In Obama’s very best year, the economy added 211,000 manufacturing jobs–and that was building from a very low base because so many jobs had been destroyed by the Great Recession. The 2018 performance is all the more remarkable because it was not a rebound from a recession. In fact, last year the economy added 207,000 manufacturing jobs. To put it into perspective, Trump’s economy added nearly as many manufacturing jobs in its first two years than Obama’s economy added in his entire second term. The manufacturing jobs boom also defies the predictions that tariffs and trade disputes would weigh on domestic manufacturers outside of steel and aluminum. Instead, manufacturing added jobs at a faster clip than the broader economy. And far from being crushed, data in January shows that export manufacturing has not only continued to grow but the rate of growth is accelerating. These are good jobs making lasting products. About two-thirds of 2018’s new manufacturing jobs are in durable goods, which includes machinery, autos, airplanes, and other big-ticket items. Economists will no doubt spend years figuring out exactly what gave rise to the Trump manufacturing boom and why so many forecasts were so far off-base. No doubt trade policy, tax cuts, and regulatory reform all played a role. But a good deal of the manufacturing revival is likely based on something less tangible but no less real: the revival of hope. People who believe we can “make America great again” are hiring, starting new businesses, and returning to the workforce. Maybe Obama’s “magic wand” comment was not so far off. But he should have called it a MAGA Wand.

HAHA!  Exactly!!  Thanks to John Carney for bringing us that piece.  Just more great news in this Trump economy!!      🙂

Apple spending $11B on Texas campus, data centers

Apple has announced that it is putting its cash pile to work. The technology giant will invest $1 billion to build a new campus in North Austin, Texas and another $10 billion for new data centers. It is all a part of a five-year investment aimed at creating 20,000 jobs in the United States. The Cupertino-based company said on Thursday it would also to set up new sites in Seattle, San Diego and Culver City, California and expand operations in Pittsburgh, New York and Boulder, Colorado over the next three years. “Apple is proud to bring new investment, jobs and opportunity to cities across the United States and to significantly deepen our quarter-century partnership with the city and people of Austin,” said Tim Cook, Apple’s CEO. “Talent, creativity and tomorrow’s breakthrough ideas aren’t limited by region or zip code, and, with this new expansion, we’re redoubling our commitment to cultivating the high-tech sector and workforce nationwide.” Apple has faced increasing political pressure to ramp up investments at home since 2016, when then presidential candidate Donald Trump targeted the company for using Asian factories for the bulk of its manufacturing. Data centers in North Carolina, Arizona and Nevada are being expanded. The new Austin campus will be located less than a mile away from its existing facilities, Apple said. Apple’s technology rival Amazon.com last month ended a months-long search for new headquarters, picking locations in New York and Virginia.

Great news!!   🙂

Dick’s Sporting Goods Says Gun-Control Stance Hurt Business, May Close Field & Stream

Dick’s Sporting Goods told investors during the Goldman Sachs Retailing Conference that its gun-control stance hurt sales of its hunting business, outdoors business, and that it may close its outdoor-focused Field & Stream stores. Edward Stack, chairman and CEO of Dick’s, said during the event that the sporting goods chain’s recent 3.9 percent drop in same-store sales was the result of a mix of factors beyond their control as well as some he called “self-imposed.” Specifically, he said, “the decisions we made on firearms” negatively affected their bottom line but the drop in sales was something they expected. They did not, however, regret their decision to change a number of their gun-sales policies and back new gun-control legislation. “Well I think it’s definitely a factor, and it’s nothing that we didn’t anticipate,” Stack said during the call. “As we put out kind of our guidance for the year and our earnings guidance for the year, we knew this would happen when—we’ve made some decisions on firearms in the past and we’ve had a pretty good idea of what these consequences were going to be. We felt that was absolutely the right thing to do. We would do the same thing again if we had a mulligan, so to speak, to do it again.” Dick’s first modified its gun-sales policy in the wake of the Sandy Hook shooting when it said it would no longer sell AR-15s and certain other semiautomatic rifles. The retailer quickly circumvented that pledge when it opened its outdoor-focused Field & Stream chain. But in the wake of the Parkland shooting earlier this year, the chain once again pledged to stop selling AR-15s and certain other semiautomatic rifles. In addition, Dick’s decided to hire their own gun-control lobbyists in order to push for stricter gun laws nationwide. That action led the National Shooting Sports Foundation—the firearms industry’s trade group—to expel the retailer. The retailer also said in February it would no longer sell firearms to legal adults under the age of 21. On Tuesday, the company settled an age discrimination suit stemming from that decision, according to a report from Oregon Public Broadcasting.

Dick’s has every right to shoot itself in the foot (pun intended) with such fascist, anti-gun, policies.  But, we-the-consumer have the right to take our business elsewhere…and we should.  For more, click on the text above.