Out of office economic notes of interest

While Newsroom Notes was out of the office last week at the Council of Supply Chain Management Professionals EDGE Conference in Nashville, there were myriad data freight transportation and logistics-related data points issued while I was out.

By ·

While Newsroom Notes was out of the office last week at the Council of Supply Chain Management Professionals EDGE Conference in Nashville, there were myriad data freight transportation and logistics-related data points issued while I was out.

Rather than filing individual stories on each item, which is what I would do in a typical week, I thought it would be more efficient to provide a mini-recap of what happened in my stead.

First off is the Institute for Supply Management’s monthly Manufacturing Report on Business. Once again, this report was very solid and confirms what have been evident for more than a while in that the economy is, and continues to remain, on very strong footing.

Again, rather than taking a deep dive into the ISM’s manufacturing data, the key metrics from the report below provide a succinct version of what happened in manufacturing in September.

The ISM’s key metric, the PMI, hit 59.8 (a reading of 50 or higher indicates growth), which was down 1.5% from October while still at a high level and growing for the 25th consecutive month. New orders, the engine that drives manufacturing, dipped 3.3% to 61.8. Like the PMI, it was also down while remaining in rarified air above 60 for the month and growing for the 33rd month.

Other key September ISM manufacturing readings include: production, up 0.6% to 63.9, growing for the 25th month; employment, up 0.3% to 58.8, growing for the 24th straight month; and inventories, down 2.1% to 53.3, growing for the ninth straight month.

While this was not in the same range as the highs for various metrics in recent months, it is still a really good month to say the least. But that also does not mean there are no concerns either, with the report’s member respondents comments replete with concerns over the impact of tariffs on operations, which, some said, are impacting profitability, and also impacting export opportunities, among other things.

On the non-manufacturing side, the September NMI, its key metric, was strong at 61.6, up 3.1% and growing for the 104th (not a typo) consecutive month. What’s more, it represents an all-time high since the index debuted in 2008.

Other key metrics include: business activity/production up 4.5% to 65.2, growing for the 110th month (also not a typo); new orders, up 1.2% to 61.6, up for the 92nd month; and employment, up 5.7% to 62.4, up for the 8th straight month.

Like its companion manufacturing report, this report helps to provide a positive outlook for the state of the economy, and it also provides a good benchmark for freight transportation and logistics professionals, too.

ISM data were not the only key metrics last week to be sure. Another key one came in the form of retail sales.

As has been reported extensively in this space and the LM news section, retail sales also serve as a decent benchmark of the state of the economy, much more so, in my opinion than that of consumer confidence, which many industry experts consider more fluid and temporary, too.

Last week, the National Retail Federation (NRF) said it expects 2018 holiday retail sales, which is comprised of November and December, excluding automobiles, gasoline, and restaurants, to head up between 4.3%-to-4.8% annually and come in between $717.45 billion-to-$720.89 billion, which is ahead of the average annual increase of 3.9% from 2013 to 2017.

This estimated increase is impressive to be sure, and it really goes without saying. What’s more, it comes on the heels of 2017 holiday sales at $687.87 billion, which marked a 5.3% annual increase over 2016, while also marking the highest annual increase since 2010, when it was up 5.2%, following the end of the Great Recession.

There is often a general consensus along the lines of “when retail sales are good, the economy is good.” It makes sense to a large degree and, really, why wouldn’t it after all? Consumer spending accounts for roughly 70% of total United States economic output, making it the largest piece of the domestic economic pie.

There are other data points I could point to that also serve as indications of how things remain in a pretty decent place overall at the moment. But with some difficult annual comparisons (especially those related to freight volumes) on the not so distant horizon, there could be some signs of thawing. We will have to see how that plays out, but one cannot really be too upset at how things are looking at the moment either.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Streamlining Your Freight with an Integrated Transportation Network
Your customers’ needs are dynamic and constantly changing; your transportation network should be in perfect tune.
Download Today!
From the October 2018 Logistics Management Magazine
Volumes are strong and steady, service is improving, yet our panel of the nation’s foremost rail experts says that there’s still plenty of work to be done on the nation’s rails to help shippers fill what’s now a massive capacity need.
Lift Truck End-of-life Management: Have a plan
Inventory Management 101: Time to step up to the plate
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
See Your Supply Chain Like Never Before
How do the world’s top supply chains see further and act faster? Many of them are gaining an understanding of how their supply chain flows are tied to outcomes to stay ahead of problems, and gain whole new efficiencies. Join us to learn more.
Register Today!
EDITORS' PICKS
8th Annual Rail/Intermodal Roundtable: Work in progress
Volumes are strong and steady, service is improving, yet our panel of the nation’s foremost rail...
Transportation Best Practices and Trends: Frios’ cool solution for a hot seller
Gourmet ice pop maker adopts collaborative cold chain solution to keep profits from melting away due...

35th Annual Quest for Quality Awards: Scaling to new heights of service
Which carriers, third-party logistics providers and U.S. ports have reached the pinnacle of...
29th Annual State of Logistics Report: Carriers take the wheel
As if higher rates and capacity shortages weren’t enough to worry about, shippers must now deal...