MAGAnomics: Manufacturing Orders Jump Highest in 17 Years
3.4% Higher Than Pre-Pandemic Levels
The ISM manufacturing survey was released yesterday showing exceptional economic news on the manufacturing front. New orders for manufactured goods jumped to their highest level in 17 years and were 3.4 percent higher than pre-pandemic levels. That data matches our earlier ground reports from across the nation.
The manufacturing sector inventories are low, that means this cycle of replenishment will continue for some time. Orders for customer goods continues to drive expansion, investment and operational increases in productivity. That customer demand drives the need for increased hiring in manufacturing…. that demand drives wages… and so the middle-class is again on track for a fantastic rebound. That’s MAGAnomics.
WASHINGTON (Reuters) – U.S. manufacturing activity accelerated more than expected in October, with new orders jumping to their highest level in nearly 17 years amid a shift in spending toward goods like motor vehicles and food as the COVID-19 pandemic drags on.
However, the media once again cannot bring themselves to cheer on a stunning economic recovery. Instead take a look at how Reuters frames their narrative:
Essentially: …“things are much better than we ever expected they could be…. but we still swear they will suck, sometime.” The manipulative spin by a disgruntled U.S. media is really ridiculous at this point.
{…] “The outcome of Tuesday’s vote is expected to lead to a brief period of uncertainty. President Donald Trump is trailing former Vice President and Democratic Party candidate, Joe Biden, in national opinion polls.” (read more)
They just cannot bring themselves to admit how President Trump’s “America First” economic policies are benefiting the U.S. working middle-class. Insufferable.
From the ISM survey:
“Among the six biggest manufacturing industries, five (Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Computer & Electronic Products; and Transportation Equipment) registered strong growth.
“Manufacturing performed well for the third straight month, with demand, consumption and inputs registering growth indicative of a normal expansion cycle. While certain industry sectors are experiencing difficulties that will continue in the near term, the overall manufacturing community continues to exceed expectations.”
What I see is the data finally catching up to what was visible in the past three months:
The 3rd quarter rebound in GDP growth was 33.1 percent, larger than the 2nd quarter contraction of 31.4 percent. And keep in mind this is with a major part of the U.S. leisure and hospitality sector remaining severely impacted. [See Table 3, Line 20]
All of these economic indicators highlight the visible reality on the ground. Despite the ongoing challenges there is good news for the most heavily impacted sectors of the economy: leisure and hospitality. Well over half of those jobs lost have been recovered. In the past four months 3.6 million jobs have been gained in this sector. Employment in food services and drinking places is still down by down by 2.5 million since the peak in February but the gain is significant and reflects a “V-shaped” recovery ongoing.
All sectors of the economy are gaining jobs back at a remarkable rate; and the key demographics are benefiting in proportion to the initial COVID-19 impact. [BLS Report HERE] With the expiration of the “extra” federal unemployment benefits at the end of July/August, the negative incentive has been removed; more people are stepping back into the workforce.
A September 2020 comparison to September 2019 [LINK HERE] – [PDF HERE] shows last month’s retail sales jumped a whopping 5.4 percent year-over-year. That means last month saw consumer spending 5.4% higher than consumer spending before COVID-19 hit the U.S. economy. Keep in mind two-thirds of U.S. GDP is driven by retail sales and consumer spending.
As many of you know I have been traveling extensively throughout the country. During these travels I make a point to visit sector-specific businesses to inquire about their economic and business growth status.
The disconnect amid a ground reality compared to business reporting and financial media is actually stunning. However, perhaps that is because my physical ‘on-the-ground’ inquires and reports are ahead of the natural lag in the economic data rolling up to the accounting level. Here’s what I can tell you with absolute certainty.
The amount of heavy equipment, industrial equipment, hardware and goods being moved around the country is more than I have ever witnessed or seen in decades of travel. The mid-west, mid-atlantic, southeast, and more specifically the south in general, has more haulers and semi-trucks on the road than I have ever witnessed…. ever…. by a substantial margin. The same is true for rail freight and cargo vessels.
Regardless of what financial pundits and economic media might be saying, the underlying economic activity in the U.S. right now is explosive and moving at a much more rapid pace than before the COVID crisis [statistically confirmed today]. Regionally, business owners and operators all report the same thing, and the same need for a larger workforce. All of them are hiring; however, some sector specifics and regional specifics are much more intense.
