The economic outlook:
U.S. firms are seeing some small  positive improvements on inflation and the supply of labor, according to a new Federal Reserve report.

  • U.S.-manufactured goods exports totaled $746.62 billion through the first seven months of 2022, using non-seasonally adjusted data, soaring 16.10% from $643.07 billion year to date in 2021. Likewise, manufactured goods imports grew 18.38% year to date from $1,372.85 billion in 2021 to $1,625.24 billion for the same period in 2022.

Manufacturing Production:
Manufacturing production rose slightly in August, according to the Federal Reserve. NAM Chief Economist Chad Moutray broke it down for us.

The topline:
“Manufacturing production inched up 0.1% in August, slowing from the 0.6% gain seen in July but expanding for the second straight month,” said Moutray.

  • However, “Despite the slight uptick in activity in the latest data, manufacturing production growth has been essentially unchanged (up 0.2%) since the first quarter, or over the past five months.”
  • “The sector has continued to grapple with soaring costs, supply chain bottlenecks, workforce shortages and geopolitical and economic uncertainties.”

When the going gets tough:
“Yet, these data also reflect some surprising resilience in the face of those problems, even with some recent softening,” said Moutray.

  • “Manufacturing production has risen by a modest 3.3% year-over-year and 1.9% year-to-date.”
  • “In addition, manufacturing capacity utilization was unchanged at 79.6% in August. Despite some easing, that remains not far from April’s reading (80.0%), which was the highest since July 2000.”
  • The big picture: “Meanwhile, total industrial production decreased 0.2% in August, pulling back after rising by 0.5% in July, largely on falling utilities output, which was down 2.3%,” said Moutray. Data for August provided mixed comfort, with positive but tepid growth for the month amid strong gains over the past year.
  • Manufacturing production inched up 0.1% in August, expanding for the second straight month. Output in the sector has been essentially unchanged (up 0.2%) since the first quarter, or over the past five months.
  • The sector has continued to grapple with soaring costs, supply chain bottlenecks, workforce shortages and geopolitical and economic uncertainties.
  • Manufacturing production has risen a modest 3.3% year-over-year and 1.9% year-to-date. In addition, manufacturing capacity utilization was unchanged at 79.6% in August. That remains not far from April’s reading (80.0%), which was the highest since July 2000.
  • Retail sales rose 0.3% in August, rebounding somewhat after falling 0.4% in July.
  • These data are consistent with a consumer that is more selective and anxious, with Americans slowing or reducing their spending in some areas on concerns about inflation and the economic outlook.

At the same time, it is important to note that Americans are still spending, with solid consumer sales growth over the past year. Retail sales have been strong over the past 12 months, rising 9.1% since August 2021, or 7.6% with motor vehicles and gasoline excluded.