U.S. Manufacturing Industry Expands

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Meanwhile, here are the major economic headlines from the last week:

• The U.S. economy expanded at a 2.6 percent annualized rate in the fourth quarter of 2022 while gross domestic product in the manufacturing industry increased by an annualized of 5.5 percent. That reading was a sizable improvement from the 0.5 percent growth rate for manufacturing seen in the third quarter. Read more here.
• The U.S. Department of Commerce reported its Personal Consumption Expenditure index (PCE), a reading the Federal Reserve uses to determine inflation, increased 0.3 percent in February, excluding the volatile food and energy components. That number was down from 0.5 percent in January. The index rose 4.7 percent from February 2022 to February 2023. That reading also was down from January. Personal incomes also rose. Read the full report here.
• The manufacturing sectors in two U.S. regions seemed to improve last month. The Federal Reserve Bank of Dallas said Texas factory activity expanded slightly after contracting in February. Its production index, a key measure of state manufacturing conditions, moved up from -2.8 to +2.5, which suggests a modest increase in output. The new orders index was negative for a tenth month in a row, however, and the growth rate of orders index was also negative and largely unchanged. Read the full report here.
• Meanwhile, the Federal Reserve Bank of Richmond revealed that manufacturing firms in the Central Atlantic region also reported modest improvements in business conditions in March. The composite manufacturing index rose from -16 in February to -5 in March. Of its three component indexes, shipments saw the largest change, rising from -15 in February to +2. Additionally, both the employment and new orders indexes improved from February but remained in negative territory.
• In other economic news: The MetLife and U.S. Chamber of Commerce Small Business Index fell slightly this quarter to 60 from 62.1 as small business owners’ outlook on the national economy weakened and as entrepreneurs continued to worry about inflation; the Conference Board’s Consumer Confidence Index rose to 104.2 in March from 103.4 in February due to an improvement in consumers’ economic outlook for the short-term, but the University of Michigan’s consumer sentiment reading fell five points from February; and the number of individuals who received U.S. unemployment benefits increased.