The Economy

The U.S. economy is seen as more resilient than many people think. According to Rick Rieder, BlackRock’s CIO of global fixed income, there is potential for gains in parts of tech, consumer, cyclical areas such as industrials, as well as housing and some leisure sectors, with the expectation of a vaccine expected to boost service sectors.

He also does not expect inflation to rise strongly as he expects the Federal Reserve to push back from yields moving much higher.

The U.S. economy added 245,000 jobs in November, the fewest since April, while the unemployment rate fell to 6.7% as many people stopped looking for work and were no longer counted as unemployed.

Key Indicators

The Architecture Billings Index rose to a score of 47.5 in October, up slightly from September’s reading. This indicates that the share of firms seeing their billings decline shrank further (a score under 50 indicates a decline in billings).

The November Purchasing Managers Index registered at 57.5%, down 1.8 points from October. This indicates expansion in the overall economy for the seventh consecutive month, as a score above 50 represents expansion. The New Orders Index registered at 65.1%, down 2.8 points from the previous month. The Production Index registered at 60.8%, down 2.2 points from the previous month.

Consumer confidence declined in November as the Conference Board Consumer Confidence Index registered at 96.1, down from 101.4 in October.

Industry News

Buyers in the U.S. steel industry are pessimistic about their ability to secure tons in the beginning of the new year as limited supply is pushing prices up. HRC futures hit a yearly low of $447 per ton in August. However, the benchmark steel prices has since risen more than 80%. While domestic supply is currently tight, analysts expect it to to come back online during the first half of 2021.

Aluminum prices are  still rising, even as global production continues to increase. Much of the rise is due to a resurgent Chinese economic recovery, which drove strong domestic demand that the country has switched to becoming a net importer on key materials. Meanwhile, North American output reached 334,000 metric tons, up from 317,000 metric tons in the previous month and up from 316,000 metric tons the same time last year.

For more information, view the December 2020 Market Insight Guide below or contact your local sales representative.

The Economy

The number of Americans filing new claims for unemployment fell last week, but still remained at recession levels. Personal income dropped in August, emphasizing the need for another relief package for businesses and the unemployed.

The U.S. economy added 661,000 jobs in September, while the unemployment rate ticked down to 7.9%. While this is a modest improvement, the economy is far from recuperating the jobs lost during March and April.

Key Indicators

The Architecture Billings Index remained at 40 for the third consecutive month, showing business conditions still stalled at architecture firms. While fewer firms reported declining billings in August than during early months of the pandemic, an index score below 50 still indicates a decline in billings.

The September Purchasing Managers Index registered at 55.4%, down 0.6 points from the August reading of 56%. The figure indicates expansion in the overall economy for the fifth month in a row, as a score above 50 represents expansion. The New Orders Index registered at 60.2%, down 7.4 points from August. The Production Index registered at 61%, down 2.3 points from the previous month.

Industry News

Iron-ore supplier Cleveland-Cliffs is morphing into a steel giant. Cliffs plans to buy the U.S. assets of ArcelorMittal. The transaction could make Cliffs the second largest U.S. steelmaker, with about 17 million tons of capacity. This could bail out the the U.S. steel industry from a looming capacity issue. This would bring the number of significant U.S. suppliers from five to four; fewer producers means they have more control over supply. In theory, this should mean more stability in commodity prices and more profitability.

For more information, view the October 2020 Norfolk Iron Market Insight Guide below or contact your local sales rep.