#43 – Inside Our Industry – The Good News Is…

The Good News Is…

With probably the most unprecedented 12-month period behind us, it appears as though there might be some glimmer of light at the end of the proverbial tunnel. Several March economic indicators pointed to positive activity and, hopefully, signs of recovery. Below is a short list that we follow in regards to manufacturing:

• On Good Friday, the Bureau of Labor Statistics released the March 2021 employment data, and payrolls increased a staggering 916,000 for the month, easily beating the consensus expected 660,000. Jobs increased most in leisure & hospitality (up 280,000), construction (up 110,000), and education and health services (up 101,000). Meanwhile, manufacturing jobs increased 53,000, while government jobs rose 136,000 (almost all in education services).We expect similar gains in jobs in the months ahead. In fact, we would not be surprised if some months of 2021 had job gains topping one million. We need it. In spite of the surge in jobs in March, total payrolls are still 8.4 million short of where they peaked pre-COVID, with the leisure & hospitality sector, all by itself, accounting for 3.1 million of that deficit. Most of those gaps should be closed by the end of this year. (Brian Westbury, First Trust Advisors L.P.)

• The March Manufacturing PMI^®registered 64.7 percent, an increase of 3.9 percentage points from the February reading of 60.8 percent. This figure indicates expansion in the overall economy for the 10th month in a row after contraction in April 2020. It’s also the highest reading since December 1983, when it sat at 69.9%. A reading above 50% means that the manufacturing economy is expanding; a reading below 50% generally indicated contraction. For example, in May 2020, when much of the country was shut down due to the COVID-10 pandemic, the ISM PMI was 43.1%. (Institute for Supply Management)

• The March Non-Manufacturing PMI, or the Services PMI^®, registered an all-time high of 63.7 percent, 8.4 percentage points higher than the February reading of 55.3 percent. The previous high was in October 2018, when the Services PMI^®registered 60.9 percent. The March reading indicates the 10th straight month of growth for the services sector, which has expanded for all but two of the last 134 months. (ISM)

It’s been a bumpy ride but we are optimistic that the path forward is getting smoother. Stay tuned…