Tuesday, January 24, 2012

More Gains for U.S. Manufacturing

From this morning's report on manufacturing activity in the Richmond Fed district (Virginia, most of W. Virginia, North and South Carolina and Maryland):

"In January, the seasonally adjusted composite index of manufacturing activity—our broadest measure of manufacturing—increased nine points to 12 from December’s reading of 3. Among the index’s components, shipments gained fourteen points to 17 and new orders doubled, picking up seven points to finish at 14. The jobs index picked up eight points to 4.

In our January survey, our contacts were more bullish about their business prospects for the next six months. The index of expected shipments increased nine points to 36, expected orders gained eleven points to finish at 32, and backlogs added eight points to 14. The capacity utilization and vendor delivery times indexes each rose nine points to finish at 11 and 20, respectively. Moreover, readings for planned capital expenditures moved up eight points to finish at 15. District manufacturers’ hiring plans in January were somewhat more optimistic as well. The expected manufacturing employment index edged up three points to 20, while the average workweek indicator held steady at 7. The index of expected wages was virtually unchanged at 19."

This follows a strong report last week from the Fed on both current and future manufacturing activity in New York state, and is consistent with today's ATA Truck Tonnage Index for December, which registered the largest annual gain in 13 years, largely due to solid manufacturing output.


At 1/24/2012 5:14 PM, Blogger Benjamin Cole said...

I love the "strong" dollar--a dollar that helps USA exporters and domestic industries and tourism.

Why the cement-heads bray about a need for a dollar with a high exchange rate is beyond me. I think they conflate the word "strong" with American strength.

My definition of a "strong dollar" is one that helps keep America strong, and our domestic industries competitive.

Print more money, Bernanke, the field is wide-open for sustained prosperity. I know prosperity is a scary thought for central bankers, but just hold your nose and let us thrive Bernanke!

At 1/24/2012 6:00 PM, Blogger Larry G said...

I thought Obama's job killing regulations were making things so uncertain that business was afraid to expand??

you mean that was a lie?


At 1/24/2012 7:08 PM, Blogger Craig Howard said...

I think they conflate the word "strong" with American strength.

I agree with you on that 100% -- even to the "cement-heads" description. But your solution, "print more money," is wrong.

Germany and Japan have labored under increasingly strong currencies for a decade or so. They retain their economic power, though, because they refuse to allow inflation to eat their capital and raise their domestic prices and wages.

Our problem is not a strong currency -- it's a strong currency coupled with incessant monetary inflation. Foreign exchange rates are certainly important, but they fade in comparison with a stable money supply.

At 1/24/2012 8:07 PM, Blogger juandos said...

Well now I also think they're have been some gains in US manufacturing but you might find this Wall St 24/7 interesting or maybe a bit aggravating...

I'm somewhat skeptical of some of it myself...

There's a paragraph offered up with each one that was supposedly lost...

Eight Industries the U.S. Has Lost to China

1. Steel
> China production: 627 million metric tons in 2010
> U.S. production: 80 million metric tons in 2010
> U.S. position: 3rd

2. Cotton
> China production: 7.3 million metric tons in 2011
> U.S. production: 3.4 million metric tons in 2011
> U.S. position: 3rd

3. Initial Public Offerings
> China production: $73 billion raised in 2011
> U.S. production: $30.7 billion raised in 2011
> U.S. position: 2nd

4. Tobacco
> China production: 3 million metric tons in 2010
> U.S. production: 0.33 million metric tons in 2010
> U.S. position: 4th

5. Autos
> China production: 18.3 million autos in 2010
> U.S. production: 7.8 million autos in 2010
> U.S. position: 3rd

6. Beer Production
> China production: 443.8 million hectoliters in 2010
> U.S. production: 227.8 million hectoliters in 2010
> U.S. position: 2nd

7. High-Technology Exports
> China production: $348 billion in 2009
> U.S. production: $142 billion in 2009
> U.S. position: 2nd

8. Coal Production
> China production: 3.24 billion short tons produced in 2010
> U.S. production: 985 million tons produced in 2010
> U.S. position: 2nd

At 1/24/2012 8:12 PM, Blogger American Factory Worker said...

Bottom Line....this is good news and I hope we hear more.

At 1/24/2012 8:55 PM, Blogger morganovich said...


as ever, you nonsense views are utterly divorced from the facts.

remember how that strong dollar killed us in the 80's and 90's?

nope. me either.

remember how the weak dollar of the 2001-present period led to increased growth and prosperity?

nope. that didn't happen either.

when you import more than export, a weak dollar hurts you. you pay more in imports. ohh, let's up our energy costs! that'll make us better off!

if you want a cement head, look in the mirror.

"trade deficit" is a meaningless idea. for the last 30 years, the best us economic performance has come during widening trade deficits. our TD declines in recession.

seriously, do you even try looking at the data before you say such stupid things? you are so categorically wrong it's surreal.

exports were up what, 180 bn in 2011 vs 2010? and imports were up what, $500bn?

that's 3X the growth in imports as exports.

calling this "export led" is foolish in light of that, no?

calling the weak dollar a benefit is equally foolish.

if this dollar is making us so "competitive" why are imports up almost 3X as much as exports in the last year?

At 1/24/2012 9:00 PM, Blogger morganovich said...


we've already covered your straw man on this.

why repeat the same foolish statement again?

if i jump on your back, perhaps you can still manage to walk, but i'm sure not making you faster, am i?

i use to think that you were just goading people and trying to be inflammatory, but i have really come around to the view that you are just incapable of logical thought.

you really cannot see why your statement is a monstrous logical fallacy, can you?

i doubt you could pass a turing test.

At 1/25/2012 3:38 AM, Blogger PeakTrader said...

U.S. manufacturing has gained tremendously, particularly after the quick and massive creative-destruction process, mostly from 2000-02, when more low-end manufacturing was offshored and more freed-up resources were shifted into high-end manufacturing (and emerging industries).

Also, U.S. terms-of-trade improved, i.e. export-led economies had to make up in volume what it lost in value, including in response to a weaker dollar, which makes U.S. goods more competitive, ceteris paribus.

The highly-skilled in export-led economies with appreciated currencies can raise their living standards by selling their assets, exchanging their currencies for dollars (to receive more dollars) and move to the U.S..

The U.S. has been a "black-hole" in the global economy, attracting imports and capital, and even pulling-in the owners of that capital themselves. Unfortunately, the U.S. government has been a black hole in the U.S. economy.

At 1/25/2012 4:31 AM, Blogger PeakTrader said...

It should be noted from 2002-07, the global economic boom, record U.S. trade deficits, high foreign demand for oil priced in dollars (which require exchanging goods for dollars), and peak oil were all interrelated and resulted in a steeper rise in U.S. living standards (including increasingly larger U.S. gains-in-trade, in part, from diminishing U.S. marginal utility from overconsumption).

At 1/25/2012 7:43 AM, Blogger Larry G said...


it is imminently logical to point out the dichotomy between the anti-Obama blather here in CD and the realities.

So MP alternates his blog posts between anti-Obama blather and the improving economy and folks like you fall right into lock step.

and you talk about "logic".

ha ha ha

If Obama's job killing policies are killing our economy then what is all this blather about "more gains for manufacturing"?

I'm not posting "inflammatory" - you guys already do that...

you cannot give credit to an improving economy and use every opportunity to diss this administration no matter what the economy is doing.

no strawman..guy.. I'm pointing out hypocrisy.

got it?

turing? "intelligent behavior"?

people with character and principles avoid cowardice.... and cowardice is a refusal to attribute an improving economy to this administration at the very same time you are claiming this administration is killing the economy.

that's illogical and cowardly.

got it Morg?

At 1/25/2012 8:51 AM, Blogger Jon Murphy said...

Gentlemen, please! Let's stop this nonsense.

Larry - I like you, but in this instance you are wrong. All we are saying here on Carpe Diem is this economic recovery is being lead by the private sector not the government. To give Mr. Obama any kind of props in this matter is just illogical. That would be like me saying "damn, I cooked a good dinner yesterday. It must be because of President Obama's stimulus plan!" Gains in the private sector should be credited to the private sector, not the government. Never the government. However, one can point to various actions taken by this government as job-killing (or at least hindering). Keystone, Solyndra, protectionsim, trade war brinkmanship, major regulations, tarriffs, subsidies, and the like. That's what we are talking about here. If the government really wants to help the economy, it can get the Hell out of the way. There is no contraction here: governments only hurt the economy, they can only help by getting out of the way. To use a quote from Paul Krugman: that is Economics 101.

At 1/25/2012 9:02 AM, Blogger Jon Murphy said...

TO build off my previous point (and to drive it into the ground):

Rick Perry did not create jobs
Mitt Romney did not create jobs
Jon Huntsman did not create jobs
George Bush did not create jobs
Bill Clinton did not create jobs
Barack Obama did not create jobs

The only way politicians can create jobs is to grow the size of government. That is the only thing they have control over. To give them credit for anything else is hero worship for something that they just happened to be in office for.

At 1/25/2012 10:21 AM, Blogger Paul said...


"it is imminently logical to point out the dichotomy between the anti-Obama blather here in CD and the realities."

So any criticism of Obama is just "blather." Hey, remember when you used to pretend to be a "just the facts" guy, no axe to grind? Good times.

As Jon pointed out, the economy is trying to gain momentum in spite of Obama, not because of him. Or perhaps you agree with Obama's belief that food stamps(up 45% since inauguration day) and unemployment checks(up 9%) create jobs. Do those last 2 metrics mean anything? Or is it just more "blather" because it doesn't help your defense of the most anti-business President since FDR?

"and cowardice is a refusal to attribute an improving economy to this administration at the very same time you are claiming this administration is killing the economy."

So what are his accomplishments that led to this new economic renaissance? Obamacare? $4 trillion in new debt? His attacks on the fossil fuel industry?

At 1/25/2012 10:26 AM, Blogger Paul said...

Jon Murphy,

"Rick Perry did not create jobs"

No, but he left a fertile ground for the private sector,kept the budget under control, and he lobbied for and signed some important legislation that also helped(like medical malpractice reform.) Compare to Obama and his anti-business record. There's a place for giving credit and criticism where it's due.

At 1/25/2012 10:53 AM, Blogger morganovich said...

"it is imminently logical to point out the dichotomy between the anti-Obama blather here in CD and the realities."


see, that in itself is preposterous illogic.

you make all manner of outlandish assumptions.

1. that obama controls the economy.

2. that if it is improving, it must be due to him. etc

a house can be warm in the winter even with the window open.

your argument implies that if it is, the open window must be making it warm.

obama is doing a great deal of damage to the economy. the fact that it is managing to improve (very slightly) anyway is a testament to the resilience of capitalism, not obama's deeply flawed policies.

the failure of the logical basis for your argument has been pointed out over and over, but you are either unable to grasp it or just a dedicated troll seeking to annoy.

i had assumed the latter, but i have really come around to the former.

you really cannot grasp the fact that if you can still run with me hanging on you back that claiming that my having on you makes you faster is ridiculous, can you?

at this point, laying it out for you over and over is clearly pointless as you are incapable basic logical thought.

it's like trying to teach a hamster to fly a fighter jet.

sorry to have engaged with you again and wasted my time.

my bad.

At 1/25/2012 10:54 AM, Blogger Jon Murphy said...

"There's a place for giving credit and criticism where it's due."

I agree with you Paul and on Perry's contributions. He created an environment where job creation could thrive, and he should get credit for that. But to give him the credit for actually creating the jobs, in my humble opinion, is erroneous. In the end, it was the companies that came in and created the jobs, not the Governor.

It may sound like semantics, but I feel it's an important distinction.

At 1/25/2012 10:59 AM, Blogger morganovich said...

let's look at it very simply:

proposition: the economy is improving

proposition: obama has policies that effect the economy

conclusion: obama's policies are making the economy improve.

that is the logical structure of your argument.

one could just as easily say:

i am getting better from the flu.

my doctor has been giving me mercury purges.

thus, mercury purges cure the flu.

and you wonder why i call you incapable of logical thought...

At 1/25/2012 2:31 PM, Blogger morganovich said...


a wonderful and concrete example of how the economy can route around obama's interference and opposition.

At 1/25/2012 5:05 PM, Blogger Jon Murphy said...

What we have here is the age-old confusion of correlation and causation.

Statistics 101, folks: Correlation does not imply causation.

Barack Obama is President when US oil production surges DOES NOT mean he caused it.

Forgive my rancor, but politicians on both sides thrive on people misunderstanding this basic concept.


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