Members:

Here is the Monday Manufacturing Economy Report plus the Global Economy Report from NAM Chief Economist Chad Moutray for 6/18/2018. The Council of Industry, as an affiliate organization of the National Association of Manufacturers is happy to share this report with our members. 

Here are some highlights from the Monday Report:
"As expected, the Federal Open Market Committee (FOMC) ended its June 12–13 meeting by hiking short-term rates by 25 basis points. This action—the second increase so far in 2018—was widely expected, with markets already pricing it in. More importantly, the Federal Reserve’s economic projections signal that there could be four hikes in the federal funds rate this year, up from a consensus estimate of around three. With the Federal Reserve’s action, the target range for the federal funds rate is now 1.75 percent to 2 percent. The projections show that range rising to 2.4 percent by the end of 2018 and 3.1 percent in 2019. The latter would indicate three hikes next year. With that said, the FOMC will hinge future interest rate increases on incoming data.
The acceleration of rate hikes likely stems from expectations of faster growth, especially in the labor market. The Federal Reserve sees the U.S. economy growing by 2.8 percent in 2018, up from an estimate of 2.7 percent in its March projections. On the jobs front, the Federal Reserve forecasts the unemployment rate falling to 3.6 percent in 2018 and 3.5 percent in 2019. That was lower than the 3.8 percent and 3.6 percent predictions this year and next year, respectively, in the Federal Reserve’s March analysis. The Federal Reserve wants to stay ahead of any overheating in economic growth, particularly as the job market falls further into “full employment” territory. " Read the Full Economic Report Here

Here are some highlights from the  Global Report:
"T he World Bank reported that the global economy is expected to grow 3.1 percent in 2018, matching the pace in 2017, according to the latest “ Global Economic Prospects ” publication. That is predicted to slow a bit to 3.0 percent and 2.9 percent in 2019 and 2020, respectively. The authors of this report see real GDP in the United States rising 2.7 percent this year and 2.5 percent next year.
This report also noted softening in the manufacturing sector worldwide, which can also be seen in the most recent purchasing managers’ index (PMI) data. Indeed, the J.P. Morgan Global Manufacturing PMI declined to 53.1 in May, the lowest level since August 2017. On the positive side, manufacturers continue to cite progress over the past few years, with activity still expanding modestly even with some slowing. In the latest survey, nearly all underlying data reflected pullbacks in activity, including new orders, output, exports and employment. In addition, input prices remained highly elevated, with that index exceeding 60—a threshold suggesting robust growth—in eight of the past nine months. Despite the slowing in current data, manufacturing leaders remain upbeat in their global outlook for the next six months." Read the Full Global Report Here.

Harold King
Executive Vice President
The Council of Industry
6 Albany Post Road
Newburgh, NY 12550
845-565-1355
hking@councilofindustry.org