A slew of economic data recently published paints a picture that’s more Rothko than Rembrandt. That picture is fuzzy, blurred, and somewhat confusing. Its interpretation is left to the viewer. But those in the metals industry know that economic conditions directly impact commodities. And so we start with a few tidbits of data that go beyond metal working and affect all manufacturing. That data relates to US productivity numbers. What do you need to know? Briefly, just the following:
Productivity increased by 2.2% in the first quarter, which was significantly higher than what economists had predicted, according to this article. That’s good, right? You bet, and the reason for that is productivity keeps labor costs in check — which in turn keeps inflationary pressures down. Of course, we metal folk know a lot about inflation, so any news to help on that front is welcome.
Another tidbit of good news … According to the Chicago Federal Reserve Bank on April 28, “regional steel output fell only by 0.2 percent after rising by 0.4 percent in February.” The machinery sector was also up by 0.6 percent and the resource sector (which includes food, paper, minerals, chemical and wood production) was also up. Although manufacturing in the Midwest certainly isn’t setting the world on fire, so far, so good.