While many parts of the global economy remain "uncertain", one thing is for sure, that the USA economy is rebounding and growing stronger every day. I base this on the exciting news released today, even when you consider the U-6 rate as it is declining as well.
Now, what does this mean for the metalcasting sector? It means more money can be pumped into the economy to buy goods and services as more people being employed, means more money available for disposable income purchases. Metalcasters can make more parts for durable goods which will be purchased on the open market.
Now, the "not so good news" is that wages remain stagnant of those employed,
"Wage growth, however, remained sluggish, rising by a mere three pennies
an hour, or a 2.0 percent annualized gain. The average work week was
34.6 hours, essentially unchanged."
So, until employers start dolling out raises and increasing work weeks, the downstream impact of increased purchasing power is negated.
Of course, with a higher employed rate, this can be an opportunity for your employees to seek "greener pastures" and "higher paychecks" if you have not been keeping up with pay and benefit increases. This is something that metalcasters really have to watch out for with their highly skilled staff.
Now, what is really interesting about the decrease in unemployment rate is that the financial markets are responding downward as there are "fears" of a interest rate increase from the US Federal Reserve. For all intents and purposes, financial institutions have had access to "free money" from the FED at interest rates basically at zero. They in turn "loan out the money" at higher rates, making a tidy profit in the meantime. This is of course taking the short view, because over all in the longer view, increased interest rates help deflect inflation, increasing "earning power" by increased rates of return on investments, etc.
So, bottom line is, before your foundry gets back up to full steam ahead at or near capacity, it's time to get the Synchro ERP software solution in place!
Until next time, see you on down the road.
Shane Allen
Head of Synchro ERP North American Operations
