John’s Blog

8-9-10

Dear Friends,

Wow what a busy week for news. The Commerce Department reported that US factory orders dropped 1.2% in June which was greater than the anticipated decrease of 0.5%.

Durable goods orders fell 1.2% as factories had lower demand. With June and May reporting a slight pullback after nine straight months of increases it looks like manufacturing is slowing down and controlling inventories.

The Commerce Department also reported that personal spending stayed the same in June.

The Institute of Supply Management released their manufacturing index showing the sector grew slightly in July, the 12^th straight month of growth. The ISM report said the manufacturing index is at the middle of their growth range at 55.5 in July. ISM also reports that manufacturers are planning on adding staff.

Housing continues to drag at the bottom of all measures with the National Association of Realtors saying that contracts to sell existing homes fell 2.6% in June. Sales are down 19% from 2009 levels.

Unemployment stayed at 9.5% with the US Department of Labor reporting that a net loss of jobs (131,000) occurred in July. The good news is that the private sector added 71,000 jobs continuing a positive trend.

Retailers had mixed results with same store sales growth of 2.9%. Analysts had been looking for a 3.1% increase. In June 2009 sales had dropped 5.1% so the trend is slowly getting better although some retailers were hammered. This is widely viewed as a lack of consumer confidence and many are worried about the back to school season.

In freight the Cass Freight Index (which looks at industrial shipments) decreased 8.6% in July which was the first drop in 6 months. Shipping spending fell July over June by 4.5%.

The AAR said that intermodal rail shipments increased 20.2% the week ending July 31^st creating a new high point. Compared to 2008, volume the week was 0.9% higher. Containers jumped by 21.9% with 197,999 units handled.

At Wagner we are very busy in some locations while others have slowed down. On balance we believe business conditions are improving very slowly.

Should you have a project to discuss don’t hesitate to give me a call. Wagner has a lot of operational strength in distribution center operations, fulfillment, and transportation.

Have a great week!

John Wagner Jr