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Numbers in Perspective

Perc Pineda, Ph.D.

The U.S. labor market continued to show signs of weakness in July, with the unemployment rate rising to 4.3%. This marked the fourth consecutive monthly increase in unemployment. Compared to the 3.5 % rate in July last year, this rise was significant enough to cause concerns, particularly in the equities market when the July unemployment data was released.

Manufacturing unemployment increased from 3.1% in June to 3.6% in July. Interestingly, unemployment in the plastics and rubber products manufacturing sector decreased from 5.2 % to 3.0 %. This decline suggests an increase in plastics and rubber products manufacturing ahead.

The Industrial Production Index for plastics and rubber products manufacturing, however, saw a moderate pullback in June, decreasing by 0.4 points from May. The Index for plastic products manufacturing specifically decreased by 1.1 points. Both decreases are relatively shallow compared to data from January 2022 and are consistent with the plastics processing GBI’s modest declines in June and July.

Given the widespread use of plastic products, changes in inflation-adjusted personal consumption expenditure provide valuable insights. Historically, annual consumer spending growth averaged 2.3 % between 2010 and 2019, a period without a recession. In the past two years, the average was 2.4 %. Including 2021, post-COVID-19 recession, the three-year average was 4.4 %. Could it decrease? It is possible. Is the economy currently operating at maximum capacity in plastics processing? It is not. Capacity utilization is low and there remains room for growth.