• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » U.S. Factories Ended 2018 on Sour Note

U.S. Factories Ended 2018 on Sour Note

January 3, 2019
Bloomberg

Five Federal Reserve indexes of regional manufacturing all slumped in December, the first time they’ve fallen in unison since May 2016 and the latest evidence that a pillar of the U.S. economy has started to wobble heading into the new year.

The Dallas Fed’s factory index unexpectedly contracted last month, falling to a two-year low of minus 5.1 from 17.6 in November, and the steepest decline since 2013. The district bank covers the oil-producing region of Texas, northern Louisiana and southern New Mexico. Oil prices are down about 40 percent from a nearly four-year high in October.

More than 20 percent of manufacturers said that their outlook worsened last month, according to the regional Fed report released Monday. “Expectations regarding future business conditions remained positive but retreated notably in December,” it said.

The report follows other weakening Fed factory gauges in the New York, Philadelphia, Richmond and Kansas City districts, just the sixth time that’s happened during the economic expansion now in its 10th year, a Bloomberg analysis of Fed data shows.

Five Fed Regions

  • New York: “Looking ahead, firms remained fairly optimistic about the six-month outlook, though optimism was slightly more tempered than in November.” 
  • Philadelphia: Measure dropped to the weakest reading since August 2016: “The survey’s broad current indicators remained positive and at relatively low levels.” 
  • Richmond: The gauge saw its steepest month-on-month point drop in a quarter century, dragged down to lowest since June 2016 by shrinking orders and shipments. 
  • Kansas City: Gauge declines to the lowest level since November 2016, with one business saying: “We were doing well this past spring until the tariffs hit.” 
  • Dallas: “Perceptions of broader business conditions turned slightly negative.” 

The Dallas gauge tracking the outlook for manufacturing fell into a contractionary reading for the first time in more than two years, while measures of shipments, capacity utilization and unfilled orders all fell to the lowest levels since late-2016. The measure for employment weakened to the lowest level in more than a year.

In the oil and gas industry, U.S. shale producers have begun to rein in spending to ride out the sudden crash of crude prices. Some explorers in the Permian Basin of Texas have begun to shut down rigs and fracking crews in response to the plunge in crude. A separate survey by the Dallas Fed showed no one in the industry saw a crash in crude prices coming.

Revitalizing American industrial might has been a hallmark of President Donald Trump’s presidency. The economy has created an average of 20,000 manufacturing jobs a month during his term, more than double the pace during President Barack Obama’s second term.

Now there are increasing signs factories are suffering from the uncertainty around Trump’s trade policy, which includes tariffs on imported steel, aluminum, and about $250bn in Chinese products.

The Fed’s latest Beige Book compilation of anecdotal accounts from district banks showed tariffs remained a concern for manufacturers, even as most districts saw moderate growth.

“Optimism has waned in some as contacts cited increased uncertainty from impacts of tariffs, rising interest rates, and labor market constraints,” the Dec. 5 report said.

For the economy more broadly, 2018 is coming to close with a few other cautionary signs.

Consumer confidence slumped in December to the lowest since July, the latest sign Americans are growing less optimistic as stock markets gyrate and the expansion moderates, according to a Conference Board report last week. Underneath that drop was the biggest plunge in 41 years in a measure of the employment outlook. Housing data are also looking less upbeat.

The next big look at the nation’s job market is scheduled for Friday, when the Labor Department releases the employment report. The data are expected to show 180,000 jobs added in December while the jobless rate held at 3.7 percent, the lowest since 1969, according to the median estimates in Bloomberg’s survey of economists.

RELATED CONTENT

RELATED VIDEOS

Global Trade & Economics HR & Labor Management Chemicals & Energy Industrial Manufacturing
KEYWORDS Chemicals & Energy Global Trade & Economics HR & Labor Management Industrial Manufacturing North America Supply Chain Analysis & Consulting
  • Related Articles

    U.S. Adds 223,000 Jobs in December, Ending 2022 on High Note

    U.S. Industrial Market Ends 2010 on Positive Note

    Trade Tensions, Labor Shortages Loom Over U.S. Factories

Bloomberg

FedEx to Cut Management Jobs by More Than 10%, CEO Says

More from this author

Subscribe to our Daily Newsletter!

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • DOCUMENTS BEARING THE INSIGNIA OF US CUSTOMS AND BORDER PROTECTION LIE ON A TABLE

    New CBP Regs Call for Greater Diligence by Brokers in Reporting Security Breaches

    Freight Forwarding/Customs Brokerage
  • A WORKER IN A WAREHOUSE, SUPERIMPOSED WITH GRAPHICS SHOWING SUPPLY NETWORK

    Enabling Intelligent Visibility With Supply Chain Analytics

    Data Management (Big Data/IoT/Blockchain)
  • A GROUP OF WORKERS RANGED IN AN OFFICE, OF DIVERSE RACE, GENDER, AGE AND PHYSICAL ABILITY

    Podcast | The Supply Chain Workforce of the Future Is Already Here

    HR & Labor Management
  • A HAND TURNS A LARGE, LIGHTED DIAL WITH THE WORD RISK ON IT iStock-NicoElNino-1364371014.jpg

    Measuring KPIs and KRIs for Comprehensive Supplier Performance Management

    Technology
  • INSIDE A WAREHOUSE, TWO HANDS HOLD A TABLET COMPUTER SHOWING A MAP OF THE WORLD

    Five Ways to Increase Supply Chain Visibility

    Data Management (Big Data/IoT/Blockchain)

Digital Edition

Scb nov 2022 sm

2022 Supply Chain Innovator of the Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Honeywell Intelligrated IFM
Infor Inmar Keelvar
Kinaxis Korber Lean Solutions Group 2H
Liberty SBF Locus Robotics Logility
LogistiVIEW Lucas Systems MCA Connect
MPO Nvidia Old Dominion
OpenText ORTEC Overhaul
Parsyl PMMI QIMA
Redwood Logistics Ryder E-commerce by Whiplash Saddle Creek Logistics
Schneider Dedicated Setlog Holding AG Ship4WD
Shipwell Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing