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I was crossing the street the other day, not looking where I was going when I was run over by a bus. Ouch.
My legs were crushed to strawberry jam, so I wasn’t feeling in tip-top shape. Thankfully, a charismatic African-American politician was walking by and came to my aid. He took my pulse and laid a hand to my forehead to see if I had a fever.
“You’re running a little hot. I’d better take care of that,” he said.
He took my wallet from my ruined pants and ran to the nearby drugstore. He came back with a bottle of Aleve and popped one into my mouth before I could tell him that I was allergic to naproxin.
I also noticed that a third of what I had in my wallet was gone.
“I saw a homeless man in front of the drugstore,” the politician said. “He looked so sad that I used what was left from the $20 in your wallet to buy him a bottle of Night Train. We all have to share the burden of our fellow man’s misfortune, you know.
“I also took a 20 to get myself this nice FeatherBed™ goose-down, hyperallergenic, contour pillow. I’m sure you’ll feel better knowing that I’ll sleep much better tonight.”
While I was being lectured about my civil duty and how I couldn’t expect to eat as much as I wanted or could afford, or how I couldn’t heat or cool my home to make it as comfortable as I’d like, a second bus came by and ran over me again since the politician hadn’t moved me from the gutter. My shoes would never be the same. But, since it didn’t look like I’d be walking anymore, their usefulness was moot.
The slim gentleman then gave me a bill for the drycleaning his suit would need for the mess my blood made of his cuffs.
“Don’t worry about paying that now,” he said. “I’m sure your kids will be more than happy to pay that once they grow up and get jobs.”
He then thanked me for my service to him and went off to what I’m sure was a very important meeting in Washington. Eh, who needs legs nowadays anyway?
If you draw any parallels between my misfortune and the Washington’s monomaniacal focus on health-care to the expense of all of our domenstic troubles, you’re reading too little into this parable.
Well, rather than taint manufacturers with my opinions, I'll concentrate on news today, rather than new products.
The state of manufacturing
The U.S. Census Bureau released some stats on Sep. 2, and the news, while not happy, jolly fun-time looks a bit better than it’s looked for a while. My analyses, for what it’s worth – it and $4 will get you a venté latté – are in italics.
According to the report, new orders for manufactured goods in July, up for five of the last six months, increased $4.6 billion or 1.3 percent to $355.5 billion
This followed a 0.9 percent June increase. Excluding transportation, new orders decreased 0.7 percent. Shipments, down 11 of the last 12 months, decreased $0.2 billion to $359.7 billion. This followed a 1.8 percent June increase.
Looks like a mixed message to me.
Unfilled orders, down 10 consecutive months, decreased $0.1 billion to $740.6 billion. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992.
Not a real sign of a robust economy flexing it’s economic muscles. More like how I feel getting out of bed in the morning: creaky, stiff, and slow.
This followed a 0.8 percent June decrease. The unfilled orders-to-shipments ratio was 5.95, down from six in June. Inventories, down 11 consecutive months, decreased $3.6 billion or 0.7 percent to $503.1 billion. This was the longest streak of consecutive monthly decreases since the March 2003 to January 2004 period, and followed a 1.1 percent June decrease. The inventories-to-shipments ratio was 1.40, down from 1.41 in June.
So, on the balance, it looks to me, a layman, like there’s some hope, but we may not have hit bottom yet.
New orders for manufactured durable goods in July, up three of the last four months, increased $8.2 billion or 5.1 percent to $169.0 billion, revised from the previously published 4.9 percent increase. This followed a 1.1 percent June decrease.
New orders for manufactured nondurable goods decreased $3.6 billion or 1.9 percent to $186.5 billion.
Shipments of manufactured durable goods in July, up two consecutive months, increased $3.4 billion, or 2 percent, to $173.3 billion, unchanged from the previously-published increase. This followed a 0.8 percent June increase.
Shipments of manufactured nondurable goods, down following two consecutive monthly increases, decreased $3.6 billion or 1.9 percent to $186.5 billion. This followed a 2.8 percent June increase. This decrease was led by petroleum and coal products, which decreased $2.7 billion or 7.2 percent to $34.3 billion.
I suppose the greenies will welcome the news that we’re using less oil and coal, thus sparing Mother Gaea, but to me it means were using less energy. Decreased energy usage means less production, and less production means less manufacturing, and less manufacturing means . . . well you get the picture, and it’s not a pretty one.
Unfilled orders for manufactured durable goods in July, down 10 consecutive months, decreased $0.1 billion to $740.6 billion, revised from the previously-published 0.1 percent decrease. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 0.8 percent June decrease.
Inventories of manufactured durable goods in July, down seven consecutive months, decreased $2.9 billion, 0.9 percent, to $313.7 billion, revised from the previously-published 0.8 percent decrease. This followed a 1.5 percent June decrease.
Inventories of manufactured nondurable goods, down 11 consecutive months, decreased $0.7 billion or 0.4 percent to $189.4 billion. This followed a 0.4 percent June decrease. Plastic and rubber products led the decrease, down $0.4 billion, 2 percent, to $18.9 billion.
By stage of fabrication, July materials and supplies decreased 1.8 percent in durable goods and increased 0.7 percent in nondurable goods. Work in process decreased 0.1 percent in durable goods and 0.8 percent in nondurable goods. Finished goods decreased 1.1 percent in durable goods and 1.0 percent in nondurable goods.
Yeah, but what’s it mean?
Okay, there were a lot of stats above, some seemed to be pointing to a recovery, others showing we haven't bottomed-out yet. I'll leave it up to an expert to interpret what's happening.
In this case, it's Cliff Waldman, economist for the Manufacturers Alliance/MAPI, and his interpretation of the durable goods report for July.
The July report on durable goods demand squares with recent data in suggesting that the U.S. and global economies have entered a slow, if somewhat uncertain economic recovery.
Excluding the volatile transportation category, total new orders for long-lasting manufactured goods were up less than 1 percent, continuing a string of modest advances that are now leading to more positive manufacturing production activity as inventories are brought into line with the still weak realities of market demand.
The mixed industry data for July, with primary and fabricated metals demand showing solidly positive activity but machinery demand suffering a sizable decline, indicates that factory activity will, for a time, likely return to the mixed situation that was indicative of the earlier months of this long recession.
Disappointingly, new orders for non-defense capital goods, excluding aircraft, a proxy for business equipment spending, slipped a bit after two strong months and remains more than 20 percent below year-ago levels.
U.S. and global activity has stabilized and financial conditions have improved modestly. But business decision-makers are going to have to see firmer and more consistent evidence of a return to the type of economic conditions that will produce solid profits before they are willing to more consistently strengthen their investment commitments and add capacity.
So, it looks like, at least to me, that we'll be in a belt-tightening mode for at least another year.
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