This Graphic Captures How Far We've Come And How Far We Have To Go

Summary

• The Manufacturing sector rebound in May was substantial. Does that mean things are just great? Far from it.
• Yes, we were up in May compared to April, but still way down compared to May 2019.

The Manufacturing sector rebound in May was substantial.

"According to the Census Bureau's latest report on Manufacturers’ Shipments, Inventories, & Orders, new orders in May were up 8 percent over April orders, while shipments increased by 3.1 percent, both on a seasonally adjusted basis."

That's big. It's the second largest month increase in a decade:

It's the third largest monthly increase in the history of the available data.

So does that mean things are just great? Far from it. This improvement joins a list of other 'best (or nearly best) ever improvement metrics' which we've seen recently, because after a crash as deep as the one we went through, the baselines are so low that it's comparatively easy to bounce back from such low levels. But if you zoom out and see the whole picture, you see how far behind we are and how far we have to come before getting back to normal production levels.

Yes, we were up in May compared to April, but still way down compared to May 2019.

Per Statista:

"As our chart shows, the value of U.S. manufacturers’ shipments was still almost 20 percent below last year’s May total, indicating that the road to full recovery is still long."

We're climbing out of the hole… but it is a very deep hole.

Sources:Federal Reserve Bank of St. Louis, Manufacturers’ New Orders: Durable Goods, as of May 2020"Manufacturing Rebounds But Remains Far Below 2019 Levels," July 2020, Statista