Oct. 7/14, 2013; Volume 27/number 12
By FCNews Staff
AMERICAN-MADE: The ‘Made in America’ revival is growing, with a majority of manufacturing executives now ready to consider bringing some production back from China, CNN has reported. Citing a survey by the Boston Consulting Group, CNN said the results showed a large increase in the number of executives that are considering bringing manufacturing back to the U.S. Eco-nomic changes in both countries are making manufacturing in the U.S. much more cost competitive. In addition, the executives said they are concerned about product quality and want their manufacturing to be closer to the customers.
MANUFACTURING EXPANDS: Speaking of manufacturing, economic activity in the sector expanded in September for the fourth consecutive month, according to the Institute for Supply Management (ISM). ISM’s index increased to 56.2 in September from 55.7 a month earlier. The New Orders Index decreased in September by 2.7 percentage points to 60.5%, and the Production Index increased by 0.2 percentage point to 62.6%. The Employment Index registered 55.4%, an increase of 2.1 percentage points compared to August’s reading of 53.3%, which is the highest reading for the year. (Economists expected the overall measure to fall to 55.) Estimates ranged from 52.4 to 57.2; readings above 50 indicate growth.
HOMES UP: New home sales in August rose 7.9% from July to a seasonally adjusted annual rate of 421,000, according to the Commerce Department. That was an increase from July’s revised number of 390,000. Three of four regions posted gains, and the 7.9% growth was the fastest sales pace since January. The number was largely in line with economists’ expectations. The August sales were also up 12.6% from last year with the median price of new homes at $254,600, up 0.6% from the year-earlier period. Regarding home prices, U.S. prices rose 12.4% in July compared with a year ago, according to the Standard & Poor’s/Case-Shiller 20-city home price index. This was the highest since February 2006. All 20 cities reported gains in July from the previous month as compared with a year ago. However, the month-over-month price gains decreased in 15 cities in July compared with the previous month.
CUTS FALL: Planned job cuts in September fell to the lowest level in three months, according to outplacement firm Challenger, Gray & Christmas. Employers said they expected to cut payrolls by 40,289 positions in September, a 20% decline from August, when job cuts reached a six-month high. Planned job cuts for the third quarter totaled 128,452, a 25% jump from a year earlier and a 13% increase from the second quarter. Challenger said that despite the recent surge, the overall pace of job cutting in 2013 is roughly unchanged from last year.
In other job-related news, initial jobless claims edged up during September’s final week but remained at prerecession levels, according to the Labor Department. Initial claims for state unemployment benefits rose 1,000 to a seasonally adjusted 308,000. Economists were looking for an increase to 15,000.
BUILDER SURGE: Homebuilder Lennar Corp., reported that third quarter net income climbed to $120.7 million, or $0.54 share from $87.1 million, or $0.40 per share a year earlier. Revenue rose to $1.6 billion from $1.1 billion a year ago. “We continue to see long-term fundamental demand in the market driven by the significant shortfall of new single-family and multi-family homes built over the last five years,” said Stuart Miller, Lennar’s CEO. “While there may be bumps along the road that may impact the short-term pace of the recovery, the long-term outlook for our business remains extremely bright.” The number of houses delivered increased to 4,990 houses from 3,655. The average sales price increased to $291,000 from $258,000, and orders rose 14% to 4,785 homes.