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ISM: US Manufacturing Expands At Best Pace In Five Months and November Auto Sales Up

By Tom Morrison posted 12-05-2016 10:12 AM

  

Reuters (12/1, Mutikani) reports that on Thursday, the Institute for Supply Management (ISM) released a report showing that US manufacturing activity rose 1.3% points to 53.2 in October, accelerating “to a five-month high in November amid a pickup in new orders and production.” The article says the report shows that the manufacturing sector “was regaining its footing after a prolonged slump.” The report “also showed some bottlenecks in the supply chain that could drive prices higher, was the latest indication that the economy continued to gain momentum in the fourth quarter.” RBS Senior Economist Kevin Cummins is quoted saying, “The factory sector has started to show some building momentum, strengthening the case for Federal Reserve action at the December policy meeting.”      

The AP (12/1, Wiseman) characterizes the report as “another good sign for the American economy,” adding that “new orders and production grew faster in November” while hiring and export orders “increased but more slowly than they did in October.”      

NAM Chief Economist Chad Moutray wrote on Shopfloor (12/1) that the report “is encouraging for a sector that has seen subpar growth over much of the past two years on global headwinds and economic anxieties.” Indeed, he says, manufacturing production in November “expanded at its fastest clip since July 2015,” with new orders accelerating slightly. Moutray adds that manufacturers “appear to be more upbeat in their assessments of the economy and about demand.”       

Bloomberg News (12/1) also reports, saying the expansion indicates American producers “are finding more relief in resilient domestic demand.” The median forecast in a Bloomberg survey of economists “was 52.5.” Deutsche Bank Securities US Economist Brett Ryan says, “You’re seeing stabilization in manufacturing.” He added that while business investment “has been extremely weak,” this is “a possible signal that we’re seeing business investment stabilize.” Bloomberg also reports that 11 of 18 industries surveyed by the purchasing managers’ group “posted growth in November, including petroleum, paper, plastics and computers, and electronics.” However, six contracted, “including the printing, wood products, clothing, and electrical equipment sectors.”     

The Wall Street Journal (12/1, Mitchell, Subscription Publication) says that as production and new orders picked up, factories must continue to rev things up in order to meet higher demand in coming months.

November US Auto Sales Experience Black Friday Boost

Reuters (12/1, Woodall) reports Black Friday deals and consumer discounts helped boost recently slumping auto sales in November to “between 4% and 5%, which could catapult results this year above a record high in 2015,” according to industry analysts and economists. A Reuters poll of 35 economic analysts revealed “expectations of a seasonally adjusted annualized sales rate of 17.7 million vehicles for November in the United States.” Another “poll of nine Wall Street analysts by Reuters showed expectations of 17.8 million in annualized sales.” The AP (12/1, Durbin, Krisher) reports according to Kelley Blue Book, “total U.S. sales were expected to rise 4% for the month to 1.37 million units,” which would mark “the highest November on record, beating the previous record of 1.32 million set in 2001.”      

USA Today (12/1, Bomey) reports individual automakers’ sales were varied, but General Motors and Ford Motor both outperformed expectations, giving their stocks a boost on Thursday. General Motors’ overall sales increased 10.2%, including “an 8% gain in retail sales, which are more profitable than sales to fleet customers.” Edmunds.com and Kelley Blue Book analysts “projected overall GM sales increases of 8.4% and 8.6%, respectively.” All of GM’s four brands reported increases, “with Chevrolet up 8.1%, GMC up 14.1%, Cadillac up 14.5%, and Buick up 16.1%.” Investor’s Business Daily (12/1, Peters) quotes GM Vice President of US Sales Operations Kurt McNeil as stating: “We are ahead of plan selling down our 2016 model year inventory and we expect to close out December with more retail share growth.” He added: “GM is heading into 2017 in a position of strength with the planned launch of key new products, like the all-new Chevrolet Equinox, into the heart of the market.”    

The Detroit Free Press (12/1) reports Ford recorded a US sales increase of 5.2% in November. The company “said it sold 197,574 new cars and trucks in November as sales of its all-new Super Duty pickup helped to boost pickup sales.” Ford Vice President of US Marketing, Sales, and Service Mark LaNeve said: “Strong retail sales increases for both F-150 and our all-new Super Duty pickups drove F-Series above the 70,000 vehicle mark — a November threshold we have not seen in 15 years.” Ford’s SUV performance was also strong, “as Escape sales increased 11%, Explorer sales rose 14%, and Edge sales climbed 32%.” Ford’s sales exceeded analysts’ predictions by slightly more than 3% for the month. Bloomberg News (12/1, Naughton) reports other automakers sales were also driven by light-truck and SUV demand. Sales of GM’s Cadillac Escalade rose 25% and Chevrolet Tahoe deliveries jumped 31%. 

Economic report provided by the National Association of Manufacturers.

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