1. The Department of Commerce reported today that shipments of manufactured durable goods increased in December to an all-time high of $230.6 billion. In nominal dollars, that’s a new monthly record for shipments of durable goods from US manufacturers, and surpasses the previous record of $229.7 billion established in January 2008 near the onset of the Great Recession. See chart above and related commentary from Scott Grannis and First Trust Advisors.
2. In another sign of strong economic performance from America’s manufacturing sector, the Chicago Fed reported today that factory output in the Midwest finished last year with a strong increase of 6.2% in December from a year earlier. Manufacturing output in the five-state area of Illinois, Indiana, Iowa, Michigan, and Wisconsin grew at more than twice the national rate of 2.7% last year, led by an especially strong gain in Midwest automotive output last year of almost 17% (compared to 10.2% nationally).
3. From last Thursday’s weekly rail traffic report, shipments of oil were up by 61%, lumber by 16%, and motor vehicles by +19% (all vs. the same week last year), as energy, housing, and automotive manufacturing continue to be three of the strongest sectors of the US economy.
Speaking of the booming energy sector, here are two items providing more evidence that the shale gas revolution is delivering a powerful energy-driven stimulus to the US economy.
4. Bloomberg reports that falling natural gas prices could save U.S. consumers $16.5 billion annually just on home energy bills. And it gets even better. U.S. households might reap total benefits of more than $100 billion a year through 2015 from lower natural gas prices when indirect savings are included from lower product prices and higher wages generated by America’s shale revolution.
5. And it’s not just consumers who are benefiting from America’s abundant shale gas. The AP is reporting that private landowners are reaping billions of dollars in royalties each year from the boom in natural gas drilling, transforming lives and livelihoods even as the windfall provides only a modest boost to the broader economy. In Pennsylvania alone, royalty payments could top $1.2 billion for 2012.
6. In other energy news, Bloomberg highlights a quiet, but promising breakthrough in the next generation of geothermal power technology, which could be the “holy grail of clean power.”
7. In California, foreclosure starts fell in Q4 2012 to the lowest level since Q4 2006, six years ago, the result of rising home values, an improving economy and a shift toward short sales.