Upbeat manufacturing data should let business owners start their week bright-eyed and cheery without the usual caffeine. After a slow start to 2014, with GDP growth estimates near a 1% annual rate, current U.S. manufacturing data indicate the economy is getting back on its feet.
Growth is occurring in a broad range of industries. Factory orders in New York hit a four-year high and inventories increased. This indicates restocking will play a role in economic growth in the second quarter after placing a toll on the economy earlier in the year. Moreover, the New York Federal Reserve’s general business conditions index rose this month to its highest point since June 2010.
Manufacturing output in May was led by a jump in motor vehicle production. Machinery, computer and electronic products, electrical equipment and appliances, and fabricated metal products also saw gains. Overall industrial production increased after dropping in April.
Growth estimates for the second quarter are predicted to be as high as four percent, which should translate into gains for the broad housing market. A recent report on homebuilder confidence increased this month, nearly reaching levels considered favorable for building conditions.
When it meets this week, the Federal Reserve is likely to translate the most recent batch of economic data as a sign of rising U.S. economic strength.