Ulbrich Economic Update - Number 47 (April 2024)

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April 2024 Economic Update Executive Summary

U.S. consumer shopping

The Americas

U.S. CONSUMER SENTIMENT IN MARCH ROSE TO THE HIGHEST LEVEL IN NEARLY THREE YEARS due in part to growing confidence that inflation will keep softening. Other March data showed: U.S. manufacturing activity achieved its fastest growth rate since September 2022. Payrolls advanced 303,000, the most in nearly a year, and the unemployment rate dropped to 3.8%. Average hourly earnings rose 0.3% from February and 4.1% YOY, the slowest annual pace since mid-2021. Fed officials affirmed their view for three rate cuts this year and upgraded their outlook for economic growth but projected slightly slower progress on inflation over the course of the year.

February data showed: Factory orders rebounded 1.4%, boosted by demand for machinery and commercial aircraft as manufacturing regains its footing. Industrial output gained 0.1%, as factory production rose 0.8%. Mining output was up 2.2%, while utilities fell 7.5% as demand for heating ebbed. Durable goods orders rose 1.4%, driven by increases in transportation equipment, primary metals and machinery. U.S. producer prices rose 0.6%, as a 1.2% jump in the prices of goods accounted for nearly two-thirds of the increase in the PPI. The leading economic indicators index rose for the first time in two years on the strength of hours worked at factories and the surging stock market. Consumer prices increased 3.2% YOY, after advancing 3.1% in January. Retail sales rose 0.6%; receipts at motor vehicles and parts dealers accelerated 1.6%. Personal spending rose 0.8%. The PCE inflation measure climbed by 2.5% YOY, a tick higher than the rise of 2.4% in January. Existing home sales jumped 9.5%, the highest level since February 2023.

Cars produced on assembly line in China


THE EUROZONE IS EDGING CLOSER TO A REBOUND IN PRIVATE-SECTOR ACTIVITY despite continued weakness in the bloc’s manufacturing sector. A PMI gauge of activity in the manufacturing and services sectors across the 20 eurozone nations rose to 49.9 in March, just shy of the 50 reading that marks the hinge between contraction and expansion. China’s manufacturing activity expanded in March for the first time since September, a further sign that the world’s second-largest economy is stabilizing.

Automotive Trends

A TESLA TEAM WILL SCOUT LOCATIONS IN INDIA FOR A MULTI-BN EV PLANT. This step towards making vehicles in India came after New Delhi lowered tariffs on higher-priced imported EVs for companies that pledge to make them domestically within three years. U.S. new-vehicle sales volume in the 1st Qtr is expected to have grown by 5.6% to 3.8mn units YOY. General Motors sold 594,233 vehicles in the U.S. in the 1st Qtr, down 1.5% YOY on lower fleet deliveries. Toyota's sales jumped 20% to 565,098 vehicles.

electra emissions free iron making

Steel Industry Updates

BILL GATES-BACKED STARTUP ELECTRA CAN NOW MAKE EMISSIONS-FREE IRON on commercial-sized prototypes without melting ore, a major milestone for a technology that is only a few years old and promised a step-change in the race to produce steel without a massive carbon footprint. Stainless steelmaker Outokumpu lowered its 1st Qtr core profit guidance, recognizing the negative impact of a month-long general strike. The strike has disrupted ports and the rail system and Finland's exports and imports.

Metals & Commodities

COPPER FOR DELIVERY IN JUNE IS $8,832/TONNE, $105 MORE THAN THE SPOT PRICE. The difference between current and future delivery is the largest ever. Analysts say the hefty gap reflects the ample supply at present and fears that the situation could change rapidly. The U.S. relies on Russian enriched uranium for a quarter of its requirements to fuel America’s fleet of more than ninety commercial reactors, which power 19% of the electricity used in the U.S. As part of the new Russian uranium-ban bill, the administration plans to allocate $2.2 billion for the expansion of uranium enrichment facilities in the United States.

Uranium Mine

Energy Sector News

OWNERS OF LEFT-FOR-DEAD URANIUM MINES ARE RESTARTING OPERATIONS to capitalize on rising demand for nuclear fuel. At least five U.S. producers are reviving mines in Wyoming, Texas, Arizona and Utah. The U.S. Energy Department awarded $6bn for 33 projects across 20 states to decarbonize energy-intensive industries and reduce industrial greenhouse gas emissions. The projects offer solutions to slash emissions in some of the highest-emitting sectors of the economy, including iron and steel.

Aerospace Developments

SPACEX LAUNCHED ITS STARSHIP ROCKET INTO SPACE IN A CRITICAL TEST, sending the colossal craft farther and faster than it had ever flown before it was lost. The mission featured several key demonstrations of the craft’s capabilities and brought the company a step closer to using Starship to launch satellites and eventually ferry humans to the Moon and Mars. Boeing CEO Dave Calhoun will step down by year-end in a broad management shakeup brought on by the plane maker’s sprawling safety crisis.

AI medical

Medical Insights

AI WILL HELP MEDICAL DEVICE COMPANIES EXPAND THEIR PORTFOLIOS AND REVENUE STREAMS while gaining efficiencies and curbing costs, Moody’s Ratings predicts in a new report. AI will start to have a positive impact on medical device companies in the next two years. J&J MedTech will use platforms from Nvidia, a maker of computer chips used for technologies like graphics and AI, to support the deployment of surgical software and devices that enable real-time data analysis in the operating room.

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