On the one hand, there are signs that raw material costs continue to decelerate, which is encouraging, while remaining at highly elevated levels. Yet, on the other hand, prices continue to accelerate or exceed expectations in some categories, such as for food and for core inflation. That will continue to put pressure on the Federal Reserve in its fight against pricing pressures

  • New orders for manufactured goods rose 1.0% to a record $556.65 billion in October. Excluding transportation equipment, new factory orders increased 0.8% to $458.90 billion, also an all-time high. In addition, new orders for core capital goods—a proxy for capital spending in the U.S. economy—rose 0.6% to $75.28 billion, which was shy of August’s record ($75.38 billion).
  • Factory orders data are consistent with a manufacturing sector that has remained resilient despite numerous challenges and an uncertain economic and geopolitical outlook, with activity continuing to hit new record levels following sizable gains over the past year, albeit in nominal terms. New orders for manufactured goods have soared 11.1% over the past 12 months.
  • The S&P Global Flash U.S. Manufacturing PMI fell from 47.7 in November to 46.2 in December, the sharpest decline since May 2020, with steep decreases in new orders, output and exports.  Employment growth stalled in December. Yet, there was stronger (cautious) optimism in the outlook for future production.
  • In the S&P survey, raw material costs grew in December at the slowest pace since July 2020, and the index for supplier delivery times expanded for only the second time in the past three years, a sign that bottlenecks continue to improve.
  • After increasing for four straight months, manufacturing production declined 0.6% in November. As such, manufacturers struggled in November amid slowing global growth and ongoing geopolitical and economic uncertainties. On a year-over-year basis, manufacturing production has risen just 1.2%. In addition, manufacturing capacity utilization declined from 79.5% in October to 78.9% in November, the lowest rate since June.