August 2020 was the eighth consecutive month and 11th of the last 13 that the real rate was negative.
The value of the U.S. dollar has fallen since April, this decline makes U.S. exports cheaper when converted to prices in foreign currencies and thus more price competitive. This should be helpful in turning around the steep contraction in export order activity for manufactured goods since the start of COVID.
Michael Guckes, Chief Economist and Director of Analytics, shares highlights from the August 2020 Gardner Business Index.
July new orders contracted just 5.7% less than one year ago, which was the slowest rate of month-over-month rate of contraction in the last five months
Jobs data from Automatic Data Process (ADP) recorded a total loss of 1.34M manufacturing jobs between January and April 2020. May reported the first month of positive manufacturing jobs growth with an increase of 252,000. Between May and August manufacturers added back nearly 600,000 jobs for a net-change of -744K in the year-to-date period.
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.
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