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Economic and Labor Market Update: November 2023

Yesterday, the U.S. Census Bureau released the September full report on manufacturers’ shipments, inventories, and orders. U.S. manufacturers’ new orders increased by $16.1 billion in September, the largest single month increase since January 2021. In addition, new orders for durable goods increased by $13.1 billion, the largest single month increase since July 2020.

After surging during and in the immediate aftermath of the pandemic, however, new orders for consumer goods peaked in June 2022 and have not matched that height since. This is reflected in regional sentiment: last week’s Chicago Fed Survey of Economic Conditions release showed that a significant majority of respondent manufacturers in the Upper Midwest reported below average activity in October. The survey’s Manufacturing Activity Index hit -50.6 in October, its fourth-lowest reading dating back to early 2013. While this was most likely reflective of the ongoing UAW strike, the index has trended negative for 16 of the last 17 months and began its negative turn in June 2022.

The positive news, however, is that consumers seem to slowly be purchasing goods again following the post-pandemic shift in spending towards services. Advance retail sales are up 3.2% since March and inflation-adjusted personal consumption expenditures for goods are up 2.3%.

If this growth continues—and with fears of a deep recession receding—regional manufacturers can look forward to some light at the end of the tunnel once the dust from the UAW strike settles.

Author: Ryan Thyfault, Economic Analyst, Kinexus Group


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