Excluding the impact of supplier deliveries, the Gardner Business Index would have registered 49.2 as opposed to an expansionary 50.7 reading. Expanding new orders and production activity in August is highly encouraging because these measures have historically acted as a bellwether for the overall index.
July income was 8.4% more than one year ago. However, the one-month rate of growth decelerated for the third consecutive month.
In July, real consumer durable goods spending was $2,027,435 million, which is an all-time high and the first time real consumer durable goods spending was more than $2 trillion.
Despite a 20-percent increase in demand for Commercial and Industrial loans, loan rates have fallen below their pre-pandemic levels. This bodes well for an economy looking to quickly recover from the recessionary shock of early 2020.
Over the last few weeks several measures of durable goods have improved markedly.
COVID-19 and work-from-home policies have created demand for new homes in the suburbs at the highest rate since the housing bubble burst and the Great Recession followed.
E-Commerce sales increased to $681.77B in 2Q2020, representing a 10.5-percent increase compared to the prior quarter. This shift in consumer behavior creates opportunities for those manufacturers willing and able to adopt to shifting consumer preferences.
COVID’s unique impact on the manufacturing economy and beyond means that the normal interpretation of diffusion indices around the world needs a re-think. The breakdown of supply chains has distorted the reading for supplier deliveries, causing the GBI and other indices like it to register inflated readings. The solution to this is to watch the index components independently with added attention given to new orders and production.
In general, the trend in the year-over-year change in the real 10-year Treasury was moving down (more negative) the last six years, which was a positive sign for durable goods manufacturing.
In July, durable goods capacity utilization was 68.1%, which was the third month in a row the rate of capacity utilization moved higher.
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