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Economic Trends for Manufacturers

Tracking Current Economic Indicators and Analyzing Data that Impacts the Industry

The latest inflation data show a frustrating resilience to moderating, disappointing markets for a third straight month as the core CPI (excluding food and energy costs) continues to surpass expectations. The YoY rate in the latest core CPI remains unchanged at 3.8%, compared to expectations of 3.7%, virtually ensuring that the Fed will not initiate a rate cut in June and may hold off until late in the year to make any move. One bright spot is that while services inflation accelerated, core goods prices continued a downward trend that started in Q4 of 2023. Another highlight: consumer confidence is rising. The Conference Board’s Present Situation Index increased to 151.0 in March from 147.6 in February.

Meanwhile, manufacturing is rebounding. After 16 consecutive months of contraction, the ISM’s Purchasing Managers Index is above 50% (at 50.3%) – effectively back in expansion territory. Manufacturing output, while down YoY by 0.7%, showed MoM improvement of 0.8% in February. Manufacturing employment stayed flat in the most recent data release, and job quits (203,000 in February) are actually at their lowest level in many years.

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