A few headlines from the Metals Service Center Institute North American Manufacturing Advocacy News 01/07/2013:
“Last week we noted that the fiscal cliff deal reached by the U.S. Congress late on New Year’s Day would not do anything to address the country’s long-term budget problems or the complexity of the federal tax code. As analysis rolls in, in also appears the deal could have a negative effect on the U.S. economy broadly and the federal budget deficit specifically. The New York Times estimates 77% of U.S. households will face tax increases this year as a result of what was in the deal.”
In a separate story the newspaper “estimates these tax increases will contribute to a nearly one percentage point drop in gross domestic product this year.”
Meanwhile, the Capitol Hill newspaper Politico reports the “deal could increase the federal budget deficit by $ 4 trillion over 10 years.”
This underscores the need for U.S. lawmakers to take a comprehensive approach to spending and tax reform. Pro-growth reforms, which must include tax and entitlement reform will lead to a higher gross domestic product, will expand revenues and make the U.S. more competitive on a global basis.
Last Friday the Labor Department announced the nation’s employers added 155,000 jobs in December, the unemployment rate remained the same at 7.8% but is down from 8.5% in December 2011. On average the U.S. created about 153,000 jobs per month, a level not capable of keeping up with population growth.
U.S. automakers announced last week that December sales increased 19% from November and were up 9% year over year.
U.S. raw steel production slid 3.9% last week from the previous week, operating at an average capability utilization rate for the week of 72.6%, in the corresponding week a year earlier mills operated at an average capability utilization rate of 76.9%.
The AISI (American Iron and Steel Institute) advises that capability utilization figures for 2013 reflect a change in the overall capacity of the market due to “the closure of several steelmaking facilities in 2012, new facilities coming online and improvements made to existing facilities to increase their capability.”
The National Bureau of Economic Research reported on the following data:
- New orders for manufactured durable goods in November, up 4 of the last 5 months, increased 0.8%.
- Shipments of manufactured durable goods, also up 4 of the last 5 months increased 1.6%.
- Unfilled orders for manufactured durable goods, up 5 of the last 6 months increased 0.1%
- Inventories of manufactured durable goods in November, up 34 of the last 35 months, increased 0.2%.
On November 30, 2012 the Federal Reserve Bank of Chicago held its 26th annual Economic Outlook Symposium. More than 125 economists and analysts from business, academia and government attended the conference.
- The consensus forecast(s) are for U.S. economic growth to be slightly above historical average with the rate of real GDP expected to be 2.3%.
- The 2012 quarterly pattern of GDP reveals strengthening growth.
- The unemployment rate is expected to remain quite high at around 7.6%.
- Inflation is expected to tick up from an estimated 2.0% in 2012 to 2.1% in qtr 4 of2013.
- Oil prices are expected to rise, averaging around $94 per barrel in the final qtr of 2013.
- Light vehicle and truck sales are expected to rise to 15.0 million units, up from 14.4 million units in 2012.
- The housing sector is predicted to show continued improvement.
The proof is in the pudding and we have 12 months to make that pudding. Only time will tell. Of course, any improvement in growth is a positive for the country, it is the continuing slow rate of growth which will be the problem. With Europe and Japan in recession, China possibly just starting to pull out of its slowdown and the United States in somewhat of a holding pattern, the outlook for a robust industrial sector is not overly bright.
You know I am a proponent of lower personal and business taxes and less government regulation in our lives as the means to create and sustain a healthy environment for businesses and individuals. The current administration believes in higher taxes on business and individuals and more government intervention into our personal lives and our businesses. Quite the opposite strategy. Unfortunately (in my opinion) we have to deal with that mantra for another four years. Pudding…..
God Bless America