Of course, the big news this week is Pope Benedict XVI's seminal visit to the U.S. and his Yankee Stadium debut (on Sunday the 20th). Also, with the first quarter earnings season in full swing, some high-profile companies have reported some less-than-stellar results to kick off the year (see here and here for a sampling). In my own little world of economic data, several indicators for the manufacturing sector were released and shed some light on the sector's performance as well as near-term expectations.
Chief among the indicators for the U.S. manufacturing sector was the industrial production index. This report was very much a mixed bag, but did show output climb fractionally in March, as a few strong elements outweighed some really weak segment of the sector. Overall production has contracted for two consecutive quarters, but the sector's core weakness stems from flagging auto production and contracting output for housing-related manufacturers. Some of the auto industry's weak production numbers can be attributed to strike-induced stoppages, but the underlying fundamentals were bad enough to push final assemblies down to their lowest seasonal total in over a decade. The release indicates some bright spots still remain in the sector, namely business equipment and export-oriented manufacturers, which are expected to buoy aggregate manufacturing activity until the contracting segments begin to show signs of life.
The MAPI Business Outlook Survey reflected the half-empty/half-full characterization of the sector. Although every component of the survey slipped in the first quarter, results still pointed to the fact that manufacturers expect to see business activity increase over the next six months. Manufacturers operating within the confines of New York Fed District reported an ever-so-slight uptick in business activity during April. By contrast, the majority of manufacturers polled in the Philadelphia Fed District observed deterioration in all aspects of their business. On a positive note, the Philly Fed Survey's special question on capital spending indicates 57 percent of respondents will either increase or not alter the spending plans they had at the beginning of the year.