Are we seeing demand dry up? This is what I hypothesize. The latest manufacturing and industrial numbers are in for the US and they were down in the month of September. This is the second month in a row we saw a negative print.
In this video I discuss how we are seeing a demand issue enter the picture. The unfilled orders keep going down yet so it output. This is what the Univ. of Michigan Consumer Sentiment was telling us since the Spring.
▶️ 3Speak
Summary:
In this video, Task discusses the recent industrial production numbers that have been released in the United States. He highlights the decline in manufacturing and industrial output such as capacity utilization rate, year-over-year decrease, month-over-month decline, and reductions in manufacturing production. Task suggests that the decreasing numbers indicate a decline in demand for products like automobiles and durable goods, leading to potential issues in the economy's recovery.
Detailed Article:
Task begins by addressing the industrial production numbers in the United States in regards to the manufacturing sector. He points out the drop in the capacity utilization rate, which fell below expectations, indicating that fewer plants are being utilized than anticipated. The year-over-year increase of 4.6, compared to the previous reading of 5.6, signifies a decline, along with a month-over-month decrease of 1.3% in September following a 0.1% decline in August. This data reflects a downward trend in industrial production, contradicting the notion of continuous production due to pent-up demand.
Task delves into the indicators that forewarned of this decline, citing regional manufacturing reports that reveal low employment rates despite companies expressing the need for more workers. The hiring rates being under 20%, and in some cases under 10%, indicate a mismatch between the need for expansion and actual employment. He emphasizes the significance of the University of Michigan Consumer Center's reports, highlighting record lows in durable goods, housing, and vehicles, indicating low consumer confidence in purchasing such products.
Furthermore, Task mentions the challenges in obtaining real-time construction data, but underscores the poor sentiment towards automobiles and durable goods from consumers. He questions the likelihood of consumers making significant purchases like cars, dishwashers, or washing machines when confidence in the industries and personal incomes is low. Task suggests that the decline in demand is evident in decreasing orders and unfulfilled orders, emphasizing it as a demand issue rather than a supply chain problem.
In conclusion, Task expresses concerns about the industrial and manufacturing sectors in the United States, describing their current state as unfavorable for economic recovery. While some may attribute the struggles to supply chain issues, Task believes that the root cause lies in declining demand. He warns of potential order cancellations from retailers, signifying a concerning trend in the manufacturing industry. The video concludes with Task wishing viewers a great day and signaling the end of the discussion until the next update.