U.S. manufacturing regains some momentum

U.S. manufacturing regains some momentumThe August numbers for manufacturing the United States indicate the sector has begun bouncing back. Industrial production increased during the month as an improvement in motor vehicle assembly gave a push to the manufacturing output figures, which could mean hope for the economy after growth got off to a slow start during the third quarter.

Another report showed a slight pull back in New York state factory activity this month. However, businesses seemed upbeat after seeing an increase in new orders and shipments, all of which seem to point toward a boost in manufacturing after it slowed down greatly in the spring.

Industrial output did increase 0.4 percent during August after having remained flat throughout July, according to the Federal Reserve. The increase has remained in line with the expectations of economists.

A separate report from the New York Federal Reserve said its Empire State general business conditions index slipped from 8.24 in July to 6.29 in August. A reading above zero does indicate expansion. Firms expect improvement in the months ahead. The index indicating six months business conditions touched its highest level within a year-and-a-half during September.

New orders rose sharply after having almost stalled during August. Shipments attained their highest level in more than a year. The industrial production report showed manufacturing production had advanced 0.7 percent, which makes up for the drop of 0.4 percent during the previous month. Automobile assembly slumped 4.5 percent during July and rebounded 5.2 percent in August.

The industrial production report showed gains almost across the board completely, pointed to some underlying momentum in factory activity, which experts could consider as support of only minimal slowing of quarterly economic growth. Many experts believe this data will keep the Federal Reserve on track to announce the tapering of the bond program.

U.S. manufacturing has struggled for the last few years, as many manufacturing jobs have been relocated overseas. Strength in the automotive industry is helping impact the numbers in recent months. As an example, Ford added 1,500 jobs after a multi-million dollar investment outside Detroit, Michigan at a manufacturing plant. The automaker needed to add a line to keep up with demand for the popular Ford Fusion mid-sized sedan.

As orders increase, and as some companies are seeing costs for manufacturing increase in foreign locations, they have begun reshoring jobs back on U.S. soil. Many of those with ties to manufacturing expect orders to only improve in the coming months.

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About the author

Drew is a regular contributor covering trending topics.