Monday, December 12, 2011

U.S. Manufacturing Profits Remain Strong in Q3; Manufacturing Continues to Outpace the Economy

The Census Bureau reported today on third quarter financial results for the U.S. manufacturing sector, with the following highlights:

After-tax profits for U.S. manufacturing corporations were just short of $150 billion during the July-September period this year.  Profits for Q3 fell by 4.5% from Q2, but were 20.4% ahead of the same quarter last year, and were the second-highest quarterly profit total for U.S. manufacturers in history (see chart above). Compared to the $118.6 billion in profits for Q4 2007 when the recession started, manufacturing profits are now 26% above that pre-recession level. 

The record profitability of the U.S. manufacturing corporations in recent quarters is just one of several economic indicators that put America's industrial sector directly at the forefront of the economic recovery.  For example:

1. The 20.4% increase in manufacturing profits over the last four quarters through Q3 is more than four times greater than the 6.5% increase in profits after-tax for all U.S. corporations during that time period.  

2. While real GDP has increased by only 1.5% during the most recent four quarter period from 2010 Q3 to 2011 Q3, the manufacturing component of U.S. industrial production grew at almost three times that rate (4.22%) from September 2010 to September 2011.

3. Over the most recent 12-month period from November 2010 to November 2011, manufacturing employment grew by 1.90%, compared to the 1.33% growth in total payroll employment over that same period.   

4. For the last six months, the jobless rate for manufacturing has been below the national average, and is currently at 7.7% and a full half-point below the U.S. average of 8.2% (not seasonally adjusted). 

By all relevant measures of economic performance: growth in profits, output gains, employment growth, and unemployment rates, American manufacturing remains the "shining star" of the U.S. economy. 


At 12/12/2011 2:39 PM, Blogger Benjamin Cole said...

Why, for so many generations, have certain cement-heads been yowling about the need for a "strong dollar"?

Were these mewlings merely mouthpieces for importers? People who wanted to buy offshore manufacturing plants?

I hope the dollar sinks even more. It may be Springtime for America.

Ben Bernanke: Print more money. Lots of it.

At 12/12/2011 6:34 PM, Blogger Buddy R Pacifico said...

"Ben Bernanke: Print more money. Lots of it."

Exports, Energy and Manufacturing have been leading the slow and enduring recovery. This is great news and surprising to most people;
but please, let's not manufacture lots more of money.

At 12/12/2011 7:02 PM, Blogger Craig Howard said...

Why, for so many generations, have certain cement-heads been yowling about the need for a "strong dollar"?

A strong dollar was, to them, a point of pride. Misplaced pride to be sure. If you were to tell them that our status as the reserve-currency issuer practically guaranteed a trade deficit, exploding heads would result.

At 12/13/2011 8:28 AM, Blogger Steave Lock said...

Actually on my opinion US market a little bit stable that EU. The figures in your report are confirming this.


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