US Outlook Report– Manufacturing: A Window into the Economy
If you delve into recent industrial production and manufacturing data you’ll see something striking about the health and direction of the broader economy. In short, the data suggests that overall economic growth is accelerating again in July, and, secondly and more importantly, the U.S. economy is probably closer to full capacity than many suspect. As manufacturing approaches full capacity, wage pressures will build and many businesses will be forced to redirect their profits away from stock buybacks and toward actual physical investment, which will help bolster U.S. GDP.
The regional manufacturing purchasing manager indexes released so far for July are pointing to an accelerating economy. Both the Empire State index released last week and the Philly Fed index released earlier this week beat economist expectations and signal a solid rebound in manufacturing activity. In fact, the Empire Manufacturing index, for the New York area, registered the strongest reading since April 2010 when the expansion was just a baby.
Read the full Report here: Bank of the West U.S. Outlook Report for July 18, 2014
Tags: economy