The Federal Reserve issued a report this week that highlights strength in manufacturing, among other sectors of the economy, which bode well for the outlook of both the national and the global economy. Leading the way are the manufacturing of automobiles, appliances, and home furnishings. There were also solid gains in mining and utilities.
Manufacturing of automobile, home appliances, and furniture saw the largest gains in production in the past six months, indicating more expansion is on the way. General Motors, Ford, Toyota, and Honda are all increasing their capacities as car and light truck sales have increased the fastest they have since June of 2007.
Ford’s manufacturing facility in Flat Rock, Michigan is adding a new shift of 1,400 workers to boost production of the Fusion sedan by as much as 30 percent. Vehicle assembly is at the highest point it has been in the past six years.
The U.S. economy is expected to grow by another 2 percent during the third quarter of this year, following up on a 2.5 percent growth for the second quarter of the year. Output of factories, mining, and utility companies is up .4 percent, with manufacturing seeing the lion’s share of these gains.
Utility output actually fell for the fifth month in a row, but mining production was up by .3 percent. This figure includes oil drilling efforts. Utility output hasn’t fallen this many consecutive months since the period between January and May of 2001.
Stock values are also up, another indication of a stronger, healthier economic situation. The S & P 500 closed at a five-week high. Manufacturing also contributed to the strength of the stock indices. The strong sales of home appliances and furniture are a good sign that the housing market is back on the upswing as well.