Manufacturing And Trade Sales Increased 0.8% In July

The combined value of distributive trade sales and manufacturers’ shipments for July, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1.360 trillion. That is up 0.8% from June and up 5.3% from a year ago.

Manufacturers’ and trade inventories were estimated at an end-of-month level of $1.750 trillion. That is up 0.4% from June and up 5.9% from a year ago.

Monthly Change

Annual Change

Total Monthly

Sales SPlit

The total business inventories-to-sales ratio at the end of July was 1.287, down from 1.291 in June. The July 2013 ratio was 1.278.

Inventory Ratio

U.S. Economy Adds 142k Jobs In August

The U.S. Bureau of Labor Statistics reported this morning that 142k nonfarm payrolls were added during the month of August. This follows revised payrolls gains of 212k in July and 267k in June.


A bulk of the August job gains came in the Professional Services and Education and Health Services industries.

Payrolls Industry

Along with Leisure and Hospitality, these 3 industries have contributed the most to the job gains over the last 8 years. Although Construction employment grew in August, it and the Manufacturing industry have had the most difficulty recovering from the economic downturn.

Industry Jobs Change

The household survey shows that 367k full-time jobs were added in August, while part-time employment decreased by 327k. Since November 2007 however, when the household survey showed peak employment, full-time jobs have decreased by 3.3 million and part-time jobs have increased by 3.0 million.

FTPT Change

Part-time employees made up 18.96% of the workforce in August, down from 19.18% in July.

Part-time Share

Those part-time for economic reasons, workers who would prefer to be full-time but are involuntarily part-time, as a share of those part-time for noneconomic reasons decreased to 37.3% from 38.2%.

PT Economic Reasons

The unemployment rate (U-3) was 6.1% in August, down from 6.2% in July. The broader underemployment rate (U-6) decreased to 12.0% from 12.2%.

Unemployment Rate

Youth unemployment continues to be volatile.

Unemployment Rate Age

Unemployment for those with a high school diploma or some college has increased in consecutive months.

Unemployment Rate Education

Blacks continue to experience the highest unemployment rate at 11.4%.

Unemployment Rate Race

The labor force participation rate was 62.8%, down from 62.9%, while the employment-to-population ratio was unchanged at 59.0%.

Labor Force Participation

Participation among men decreased to 69.2% from 69.3% and participation among women was unchanged at 56.9%.

Participation by Sex

The participation rate for prime age workers (25-54) increased to 81.1% from 80.8%.

Participation Rates Age

However, since the total participation rate peaked in August 2008, participation has only risen in the 55+ age bracket.

Participation Rates Change

Average weekly hours worked by production and supervisory employees were unchanged at 33.7, while average hourly earnings increased to $20.68 from $20.62. This increased average weekly earnings to $696.92, up 2.4% from a year ago.

Earnings Growth


Average duration of unemployment in August was 31.7 weeks, down from 32.4 in July and the high of 40.7 in 2011, but still elevated by historical standards.

Unemployment Weeks Duration

Of those unemployed, 46.8% have been so for 15 weeks or longer.

Unemployment Duration

Overall, this was not a great employment report as the number of job additions was low, but there were some silver linings: The new jobs were overwhelmingly full-time positions, the length of time people are staying unemployed is shortening, and labor force participation increased for prime age workers.

Industrial Production Increases 0.4% In July

U.S. industrial production increased 0.4% in July after having increased 0.4% in June. At 104.4% of its 2007 average, total industrial production in July was 5.0% above its level of a year earlier.

Industrial Production

Industrial Production Change

The output of manufacturing increased 1.0% in July, the output of mines increased 0.3%, and the output of utilities decreased 3.4%.

Capacity utilization for total industry increased in July to 79.2%. That is 0.9% below its long-run (1972–2013) average.

Capacity Utilization

Full table from the release:

IP Table

America’s 10 Worst Urban Centers

On several measures of economic health, Detroit ranks as one of the worst areas in the nation. The poverty rate is 36%, over half of the population has migrated away, there are few cities with more crime, and the unemployment rate is an abysmally high 16%.

J.P. Morgan points out that many of the U.S. cities that have fallen on hard times are, like Detroit, former manufacturing centers.


The Deurbanization Of The U.S.

A new paper examines the deurbanization of the U.S. that has followed the urbanization of the last 2 centuries. Several factors including the high city crime and reduced commuting costs have encouraged more Americans to reside in the suburbs.

Urbanization in the United States, 1800-2000“:

This handbook chapter seeks to document the economic forces that led the US to become an urban nation over its two hundred year history. We show that the urban wage premium in the US was remarkably stable over the past two centuries, ranging between 15 and 40 percent, while the rent premium was more variable. The urban wage premium rose through the mid-nineteenth century as new manufacturing technologies enhanced urban productivity; then fell from 1880 to 1940 (especially through 1915) as investments in public health infrastructure improved the urban quality of life; and finally rose sharply after 1980, coinciding with the skill- (and apparently also urban-) biased technological change of the computer revolution. The second half of the chapter focuses instead on the location of workers and firms within metropolitan areas. Over the twentieth century, both households and employment have relocated from the central city to the suburban ring. The two forces emphasized in the monocentric city model, rising incomes and falling commuting costs, can explain much of this pattern, while urban crime and racial diversity also played a role.

The US Manufacturing Regional Shift

A recent presentation from the U.S. Bureau of Economic Analysis includes the below depiction of the regional shift in U.S. manufacturing. From 1981 to 2011, manufacturing activity moved out of the New England, Great Lakes, and Mideast regions and moved into the Southwest, Southeast, and Far West regions.