U.S. manufacturing, home sales increase
U.S. manufacturing activity surged to its highest level in nearly 14 years in early January, but bottlenecks in the supply chain caused by the coronavirus pandemic are driving up prices and signaling a rise in inflation in the months ahead.
Other data on Friday showed an unexpected increase in sales of previously owned homes last month. Manufacturing and the housing market are helping to anchor the economy, which is being battered by a wave of coronavirus infections. But the pandemic is causing labor shortages at construction sites and factories, which could erode some of the strength in the manufacturing and housing sectors.
Data firm IHS Markit said its flash U.S. manufacturing PMI accelerated to a reading of 59.1 in the first half of this month, the highest since May 2007, from 57.1 last month.
Economists had forecast the index would slip to 56.5 early this month. A reading above 50 indicates growth in manufacturing, which accounts for 11.9 percent of the U.S. economy. Manufacturing is being supported by businesses rebuilding inventories and a shift in demand toward goods from services because of the pandemic.
The IHS Markit survey’s measure of new orders received by factories raced to its highest level since September 2014. The surge in demand reflected both existing and new customers, “with some clients reportedly committing to orders previously placed on hold.” That led to manufacturers hiring more workers early this month. The survey’s factory employment index increased to 54.8 from 52.2 last month.
But the pandemic is gumming up the supply chain, resulting in manufacturers paying more for materials, and they are passing on the higher production costs to consumers. The survey’s gauge of prices received by factories vaulted to its highest level since July 2008.
DuPont settles environmental dispute
DuPont de Nemours and its 2015 spinoff Chemours have agreed to a $4 billion settlement of a dispute over environmental liabilities that were shifted to the new company.
The accord, which also includes DuPont’s former seed business Corteva, covers payments for liabilities tied to a class of chemicals known as PFAS, the companies said in a statement Friday. DuPont and Corteva will split “certain qualified expenses” 50-50 with Chemours, the companies said. They specified expenses incurred over a term of 20 years or $4 billion at most.
PFAS are widespread in the environment and human blood after decades of use to make things slippery, nonstick or waterproof. Their bonds are so stable that they’re known as “forever chemicals.” Used to make items such as carpets, fabrics and firefighting foams, they’ve been found at high levels in some areas, particularly around airports and Air Force bases, prompting concerns about drinking water and creating costs for municipal water systems and states.
The companies also agreed to pay $83 million to resolve almost 100 cases covered by multidistrict litigation in Ohio. DuPont and Corteva each will contribute $27 million, while Chemours will pay $29 million.
Carnival’s flagship cruising brand extended its pause on U.S. departures through the end of April and shelved operations in Australia through mid-May amid lingering pandemic concerns. Carnival Cruise Line also canceled European trips on Carnival Legend that had been poised to start in May, and delayed trips on Mardi Gras from Port Canaveral, Fla.