The Census Bureau issued its latest report on US Manufacturing. Census is charged with surveying several business conditions throughout the country, and New Factory Orders is one of them.
In today’s report, Census notes that new orders have increased in five out of the last six months.
You can see the report here:
https://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf
Now let’s add a little perspective to this report. For that perspective, I’ve added a chart showing how dramatically the manufacturing sector has recovered since the end of the Covid-19 Pandemic, going from $355 billion in new orders in 2020 to $593 billion in 2022. That’s an impressive 67% improvement in just a couple of years.
But then something happened. New orders peaked in June of 2022 and have been flat to slightly down since. What do you suppose happened? Indeed it couldn’t have been the Federal Reserve’s tight money policy. They were making it more difficult, to say nothing of more expensive, for manufacturers to finance their new projects.
The Fed may be getting more than it bargained for by rapidly raising interest rates.
Manufacturers New Orders (blue, left), Fed Funds (interest rate, red, right)
