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The Bureau of Economic Analysis said that personal income increased by 0.4 percent for the second straight month in January, exceeding the consensus estimate of 0.3 percent growth. Over the past 12 months, personal incomes have risen 3.8 percent in January, down from 4.3 percent in December. Even with that easing, income growth remains quite healthy. For manufacturers, total wages and salaries rose from $840.9 billion in December to $847.8 billion in January. That translated into a 4.0 percent increase in manufacturing wages and salaries year-over-year, up from $815.5 billion in January 2017.

At the same time, personal spending eased from a very robust 0.7 percent increase in December to 0.4 percent growth in January. Despite the slower figure, the data continue to be consistent with strong gains in personal consumption. Over the past 12 months, personal spending has risen by 4.4 percent, off slightly from the 4.5 percent pace observed in the prior report. In January, nondurable goods spending rose 1.0 percent, but purchases of durable goods fell by 1.5 percent. On a year-over-year basis, goods spending for durable and nondurable goods were increased at very healthy rates, up 4.6 percent and 4.3 percent, respectively, since January 2017.

The savings rate rose from 2.5 percent in December, its lowest rate since September 2005, to 3.2 percent in January. Despite the uptick in the savings rate, it has largely trended lower since peaking at 4.1 percent in February 2017.

In other news, the personal consumption expenditure (PCE) deflator increased by 0.4 percent in January, its strongest monthly gain since September. Total prices for consumers largely accelerated on a jump in energy goods and services costs, up 3.0 percent in January. Yet, core inflation—which excludes food and energy—was also higher, up 0.3 percent in January.

Despite the large gains in prices in January, overall inflation remains quite modes and largely under control, at least for now. After seeing pricing pressures accelerate strongly earlier in 2017—with the PCE deflator peaking at 2.2 percent year-over-year in February—inflation has pulled back since then. Since December 2016, the PCE deflator has risen by 1.7 percent, unchanged from the previous report. In addition, core PCE inflation was up 1.5 percent year-over-year in January for the third straight month, well below the Fed’s goal of 2 percent.

The post Personal Income & Spending up 0.4% in January; Manufacturing Wages & Salaries up 4% over the Past 12 Months appeared first on Shopfloor.

The Institute for Supply Management (ISM) today reported that manufacturing is now expanding at the fastest rate in nearly 14 years. The ISM Manufacturing Purchasing Managers’ Index (PMI) rose from 59.1 in January to 60.8 in February, the highest level since May 2004. Given the strength of that headline figure, it should not be a surprise that many of the underlying data points are near or exceed 60, which would indicate robust growth for the month. This included new orders (down from 65.4 to 64.2), production (down from 64.5 to 62.0), employment (up from 54.2 to 59.7) and exports (up from 56.2 to 59.8). Regarding the latter number, exports once again expanded at their best rate since April 2011, with international sales helping to fuel stronger overall demand.

The sample comments tended to echo those findings, with healthy gains in demand, production and hiring and a very optimistic outlook for the coming months. Tax reform was seen by one respondent as “making a difference” for their business, spurring more capital spending on equipment, among other things. In addition, several of those completing the latest ISM survey noted the inability to attract and retain workers, with the labor market continuing to tighten. Meanwhile, prices for raw materials (up from 72.7 to 74.2) have remained highly elevated, with the measure at a level not seen since May 2011. This reflects a rebound in some commodity costs, even as overall pricing pressures continue to be largely under control, at least for now. In other news, inventories (up from 52.3 to 56.7) also accelerated in February for the second straight month, rising to its highest point since March 2010. More than anything, the uptick in inventories is consistent with the healthy growth in overall production.

This all comes on the heels of a report in January showing that the manufacturing sector now contributes a whopping $2.25 trillion to the American economy — the highest level ever and up nearly one-third (32.5 percent) since the Great Recession. Fittingly, we learned that last statistic on the eve of President Trump’s one-year anniversary in office. Indeed, the enactment of historic tax reform, significant regulatory relief and the overall shift to a more pro-business environment under the current political leadership in Congress and the White House is clearly resulting in tangible benefits for manufacturers and manufacturing workers. Now, in order to sustain that momentum, Washington needs to keep up the pace with policies like continued regulatory reform, smart trade polices and — importantly — necessary investments in infrastructure.

The post ISM: Manufacturing PMI Rose to 60.8 in February, the Highest Level since May 2004 appeared first on Shopfloor.

The Census Bureau said that private manufacturing construction spending was up 1.2 percent in January, rising for the fourth straight month. The value of construction put in place in the sector increased from $63.71 billion in December to $64.50 billion in January. Since falling to $61.18 billion in September, private manufacturing construction has started to trend higher, which would be consistent with the recent uptick in economic activity and a stronger overall outlook. With that said, construction in the sector has drifted lower since achieving the all-time high of $82.13 billion in May 2015. Along those lines, manufacturing construction has declined by 9.7 percent year-over-year. For now, though, the good news is that the sector appears to have turned a corner, moving in the right direction.

Overall, private nonresidential construction spending decreased by 0.5 percent in January, pulling back from its best reading since June. Over the past 12 months, this figure has risen 1.7 percent. In the latest figures, the data were mixed. In addition to increased manufacturing construction spending, there were more dollars spent on construction projects in the communication (up 5.4 percent), amusement and recreation (up 2.4 percent), lodging (up 1.9 percent) and transportation (up 1.7 percent). At the same time, activity was lower in the following segments: power (down 6.2 percent), educational (down 3.1 percent), commercial (down 2.7 percent), health care (down 1.0 percent), office (down 1.0 percent) and religious (down 0.7 percent).

Meanwhile, private residential construction spending was up 0.3 percent in January, with a modest 4.2 percent year-over-year gain. More importantly, private residential construction spending was $523.17 billion in January, its best reading since April 2007. In the latest data, single-family construction rose by 0.6 percent and 8.8 percent over the past 12 months, with multifamily activity off 1.3 percent and was down 2.4 percent year-over-year. In addition to those components, public construction spending jumped 1.8 percent in January, with a gain of 8.2 percent over the past year.

The post Manufacturing Construction up 1.2% in January, Rising for the Fourth Straight Month appeared first on Shopfloor.

With record-high optimism at their backs and pro-growth policies coming out of Washington, manufacturers across the country are announcing new investments and expansions at an exciting clip.

Citing tax reform and economic growth, DENSO, a global manufacturer of automotive technology, systems and components suppliers, announced on Wednesday that it plans to invest $190 million in its facility in Athens, Tennessee:

DENSO, one of the world’s largest automotive technology, systems and components suppliers, is expanding its operations in North America through a $190 million investment in its Athens, Tennessee facility. The investment will add four new production lines and 320 jobs, increasing DENSO’s ability to produce and deliver key parts for its customers.

This is the latest in a line of strategic investments in North America and part of DENSO’s commitment to make Tennessee a primary manufacturing center. The US economy is expected to keep growing due to policies, including recent tax reform, and DENSO plans to continue advancing automotive innovation and manufacturing in the US.

In the United States alone, DENSO employs more than 17,000 people in AlabamaArkansasCaliforniaIowaGeorgiaKentuckyMichiganNorth CarolinaOhioPennsylvaniaSouth CarolinaTennessee and Texas. DENSO announced a $1 billion investment in its Maryville, Tennessee facility last year.

The National Association of Manufacturers is committed to fighting for pro-growth policies that allow manufacturers like DENSO to invest, expand, and compete.

The post DENSO Plans To Invest $190 Million In Tennessee Manufacturing Facility, Creating 320 New Jobs appeared first on Shopfloor.

The Census Bureau and the U.S. Department of Housing and Urban Development said that housing permits soared in January to their best pace since June 2007. New residential housing permits increased from 1,300,000 units at the annual rate in December to 1,396,000 units in January, a post-recessionary high. This should bode well for the housing market in the coming months, with stronger permitting activity pointing to healthy construction data moving forward. In that way, this report mirrored a similarly upbeat assessment from homebuilders, who anticipate single-family home sales rising briskly at rates not seen since June 2005. On a year-over-year basis, housing permits have risen 7.4 percent, up from 1,300,000 units in January 2017.

With that said, the bulk of the jump in housing permits in the latest data came from the multifamily segment, which can be volatile from month to month, up from 419,000 to 530,000 units for the month. In contrast, single-family permitting edged down from 881,000 to 866,000.

Meanwhile, new housing starts were also encouraging. New residential construction rose from an annualized 1,209,000 units in December to 1,326,000 in January, its highest level since August 2007. It is also its first reading over 1.3 million units in that time frame. Single-family (up from 846,000 to 877,000) and multifamily (up from 356,000 to 449,000) activity were both sharply higher in January. In January, starts were up in every region of the country except for the Midwest. Housing starts have increased 7.3 percent over the past 12 months, up from 1,236,000 units one year ago.

The post Housing Starts and Permits Soared in January to the Best Paces since Mid-2007 appeared first on Shopfloor.

(Photo Credit: Flickr/Central Texas Food Bank/CC BY-ND 2.0)

Major U.S. companies such as Home Depot and Best Buy have announced bonuses for employees in recent weeks following the passage of the Tax Cuts and Jobs Act. Food manufacturer Tyson Foods is the latest to join the list.

Tyson Foods announced this week that it plans to award bonuses ranging from $500 to $1000 to more than one hundred thousand employees, citing savings from tax reform:

Arkansas-based Tyson Foods Inc. says more than 100,000 employees will receive bonuses as a result of company savings due to the overhaul of federal tax laws.

Tyson said Thursday that full-time employees who do not receive an annual bonus will get $1,000 and part-time workers who receive no annual bonus will get $500.

“These team members are the backbone of our business,” Tyson Foods CEO Tom Hayes said in an email to company employees.

Tyson Foods said it expects to save over $300 million in taxes due to changes in the law. In addition to the bonuses, Tyson Foods will also boost spending on education, including English as a second language education, and accelerate capital projects to strengthen operations in the United States.

“As part of this investment, we will move faster on sustainability and animal well-being initiatives, shrinking our environmental footprint, protecting the animals in our care and giving the world’s growing population greater access to sustainable food,” Hayes said.

Manufacturers promised that sweeping changes to the nation’s tax code would allow them to both expand their businesses and invest more in their workforce. So far in 2018, U.S. manufacturers have kept their promise.

The post Tyson Foods Announces Tax Reform Bonuses For 100,000 Employees appeared first on Shopfloor.