ISM Manufacturing Report on Business: February 2012

Today, the Institute for Supply Management released their latest Report on Business for the manufacturing sector indicating that manufacturing activity pulled back in February with assessments of most measures cooled.

At 52.4 the purchasing manager’s composite index (PMI) declined a notable 3.14% since January remaining 14.66% below the level seen a year earlier.

Respondents indicated that while there is still some concern over the strength of the recovery and rising commodity prices, outlook was overall positive going forward:

"Business is holding steady. Concern over commodity prices ongoing." (Chemical Products)

"Still somewhat cautious about recovery. Expecting a good year, but not seeing orders yet." (Machinery)

"Demand remains consistent to strong on all levels." (Paper Products)

"Demand from auto makers is getting stronger." (Fabricated Metal Products)

"Manufacturing is busy. Spending money on new equipment to accommodate customer demands. Material prices are staying in check." (Food, Beverage & Tobacco Products)

"There seems to be a much more positive outlook for the economy. Customers are ordering material for stock rather than just working hand-to-mouth." (Fabricated Metal Products)

"Global GDP softening and beginning to impact the demand chain." (Computer & Electronic Products)

"Production is busy — several new large projects." (Primary Metals)

"Customers [are] lowering inventory levels, anticipating price decrease due to third-party published reports on materials." (Plastics & Metal Products)

"We are optimistic about the U.S. market this year, a little hesitant about what may happen in Europe and unsure about China." (Transportation Equipment)

"Shipments are increasing over last year. Waiting to see if the trend continues." (Wood Products)

Constuction Spending: January 2012

Today, the U.S. Census Bureau released their latest read of construction spending showing improvement from near-cycle low levels of spending in January for residential construction while indicating a slight pullback for total non-residential spending.

On a month-to-month basis, total residential spending increased 1.78% from December and rose 6.73% above the level seen in January 2011 while remaining a whopping 62.50% below the peak level seen in 2006.

Single family construction spending increased 2.46% since December and rose 5.48% since January 2011 but remained a whopping 75.78% below it's peak in 2006.

Non-residential construction spending declined 1.54% since December but climbed a whopping 16.60% above the level seen in January 2011 but remained a whopping 33.14% below the peak level reached in October 2008.

The following charts (click for larger dynamic versions) show private residential construction spending, private residential single family construction spending and private non-residential construction spending broken out and plotted since 1993 along with the year-over-year, month-to-month and peak percent change to each since 1994 and 2000 – 2005.

Extended Unemployment: Initial, Continued and Extended Unemployment Claims March 01 2012

Today’s jobless claims report showed that both initial and continued unemployment claims declined slightly while seasonally adjusted initial claims continued to trend well below the closely watched 400K level.

Seasonally adjusted “initial” declined to 351,000 claims from last week’s revised 353,000 claims while seasonally adjusted “continued” claims declined by 2,000 resulting in an “insured” unemployment rate of 2.7%.

Since the middle of 2008 though, two federal government sponsored “extended” unemployment benefit programs (the “extended benefits” and “EUC 2008” from recent legislation) have been picking up claimants that have fallen off of the traditional unemployment benefits rolls.

Currently there are some 3.37 million people receiving federal “extended” unemployment benefits.

Taken together with the latest 4.01 million people that are currently counted as receiving traditional continued unemployment benefits, there are 7.38 million people on state and federal unemployment rolls.