Anyone watching the economy these days can easily get overwhelmed by all the data. Often, the challenge is trying to find an identifiable tone playing underneath all the noise.
We’ve got a nurses strike looming in the Twin Cities, continuing challenges in the housing and commercial real estate markets, a ballooning federal deficit, and an ecological and economic disaster unfolding in the Gulf of Mexico.
But in the face of those gloomy facts, several recent bits of economic news and financial indicators are sending decidedly positive notes as the economy, however tepid and weak, continues to recover.
At the top of the list, the U.S. Bureau of Labor Statistics has released three separate indicators this week:
• This morning’s jobs report shows employment growing by 431,000, mostly because of the addition of 411,000 temporary census workers in May. Private-sector employment added 41,000 jobs. Manufacturing, temporary-help services and mining all added jobs, while construction employment declined. The unemployment rate continued to decline, edging down to 9.7 percent from 9.9 percent in April and off from its peak of 10.1 percent last fall.
The Minnesota Department of Employment and Economic Development is scheduled to release the state’s May unemployment numbers on June 17.
• Labor productivity numbers released Tuesday increased at a 2.8 percent annual rate during the first quarter of 2010, with output rising 4 percent and hours worked rising 1.1 percent in the overall economy. The numbers were even stronger in the manufacturing sector, with 1.5 percent productivity growth, 7.2 output growth and a 5.6 percent increase in hours worked.
• Earlier this week, the previously announced state jobless numbers were broken out by metropolitan statistical areas, showing improvement in the seasonally unadjusted unemployment rate across 371 metropolitan areas. All of Minnesota’s metro areas showed improvement, both month to month and year over year. Duluth showed the largest improvement from April 2009 to April 2010, a 1.9 percentage point drop in unemployment. Mankato posted the largest monthly improvement,1.6 percentage points, March to April.
In addition,U.S. manufacturing grew at a faster pace in May than forecast, with factories adding workers to meet the greatest export demand in two decades, as well as a revival in domestic orders, according to the latest Manufacturing Institute for Supply Management Report On Business. The survey of corporate supply managers reportedgrowth in 16 of18 manufacturing industries in May, the 10th consecutive month of growth, and the 13th consecutive month the overall economy grew.
A subset of the survey focusing on nine Midwestern states, including Minnesota, shows advances for a sixth straight month, pointing to a growing regional economy. The measurement of Mid-America Business Conditions, released by Creighton University, also shows the regional employment index rising above neutral growth for a fifth straight month and reaching its highest level in nearly four years.
Nevertheless, these surveys also found cautious hiring behavior and concerns that economic turmoil in Europe and a strong dollar could dampen U.S. exports and the recovery.
So what do the data, coming out of the “real” economy, show, particularly for local companies?
Earlier this week, IBM projected 4 percent growth, or a $953 million increase in sales, from a year ago for electronics and appliances by U.S. retailers in June through August. That presumably is good news for Best Buy and, to a lesser extent, Target.
Despite the economic worries in Europe and a stronger dollar, some of Minnesota’s largest export-oriented manufacturers continue to report solid growth in revenue and earnings for their most recent quarterly results.
Two weeks ago, Bloomington-based Donaldson Co. cited “improving global economic conditions, new product introductions and emerging market growth, as it reported 20 percent year-over-year sales growth, 91 percent earnings growth and upped its outlook for the year.
At the same time, Medtronic pointed to international revenue growth of 20 percent as it reported a “record fourth quarter,” its first $4 billion sales quarter ever and 52 percent growth in earning per share. The Fridley-based company also issued a bullish outlook for revenue and earnings growth next year.
Earlier, St. Paul-based Ecolab credited its most recent 6 percent revenue growth to exports and upped its outlook for the year. Maplewood-based 3M Co. told a similar tale, crediting “improved market penetration and new product flow along with significant growth in important end markets” for its 25 percent revenue growth and 74 percent earnings growth.
We’ll continue to get more signals in coming days as the Federal Reserve Banks around the county, including the Minneapolis fed, release their quarterly beige book survey of business conditions on June 9. We’ll see if the notes turn flat or continue to strike a positive tone.