August 30, 2010
After a slight improvement the prior week, last week's economic reports again turned negative, with five of the seven major indicators worsening. (To see all of last week's reports, see the Latest Economic Reports section below.)
On the manufacturing front, two regional reports by Federal Reserve district banks showed that the manufacturing sector continued to slow in the third quarter. Additionally, while overall durable goods orders rose in July, this was entirely due to the volatile aircraft sector, in which the time from orders to production can be months into the future.
At the same time, the housing market continues to turn down following the temporary surge in activity from the end of the homebuyer tax credit.
The biggest news last week was Friday's revision to second quarter GDP growth (see chart above), which showed that after an advanced estimate of 2.4 percent (see grey bar in chart), the economy grew a slower 1.6 percent in the three months ending in June (see green bar).
The deceleration in second quarter growth was mainly due to an increased trade deficit from higher imports and lower exports. In other areas (consumer spending, business investment, residential investment and government spending), changes were not significant.
After falling 4.1 percent during the recession (see black line in chart), a little more than two-thirds of the economic decline has been regained during the past year. Still, the economy remains 1.3 percent below the prior peak reached in the fourth quarter of 2007. To put this recovery in historic context, while the upturn to date has been faster than the initial year of growth following both the 1991 and 2001 recessions, which were mild, the current recovery is less than half the initial year of growth following both the 1974-1975 and 1981-1982 recessions.
Dave Huether
Dave Huether
Chief Economist
National Association of Manufacturers
CALIFORNIA WORRIED ABOUT BUSINESSES MOVING TO UTAH
August 30, 2010 – Mary Richards - KSL.com
SACRAMENTO -- California business leaders are trying to get their state to make some changes after more California companies announced they are expanding in Utah.
The California Chamber of Commerce and others want the Legislature to pass a more business-friendly budget. Some leaders are expressing concerns that e-Bay, Adobe, Twitter, Electronic Arts and Oracle are all expanding in Utah.
These expansions may due to Utah's "West Coast Initiative."
"In a nice way we want to let people know we are open for business," said Spencer Eccles, executive director of the Utah Governor's Office of Economic Development (GOED). "One of the No. 1 factors is that we are a very business-friendly state."
He says it also helps that Utah has the youngest workforce in America.
Eccles says he and others will be going to California in the next few weeks to meet with five other companies in industries from renewable energy to information technology.
But Eccles says GOED is also working to grow Utah companies as well. He says 80 percent of incentives offered went to Utah-based businesses, and they were able to help get $500 million in government contracts for small companies in this state.
E-mail: mrichards@ksl.com
SACRAMENTO -- California business leaders are trying to get their state to make some changes after more California companies announced they are expanding in Utah.
The California Chamber of Commerce and others want the Legislature to pass a more business-friendly budget. Some leaders are expressing concerns that e-Bay, Adobe, Twitter, Electronic Arts and Oracle are all expanding in Utah.
These expansions may due to Utah's "West Coast Initiative."
"In a nice way we want to let people know we are open for business," said Spencer Eccles, executive director of the Utah Governor's Office of Economic Development (GOED). "One of the No. 1 factors is that we are a very business-friendly state."
He says it also helps that Utah has the youngest workforce in America.
Eccles says he and others will be going to California in the next few weeks to meet with five other companies in industries from renewable energy to information technology.
But Eccles says GOED is also working to grow Utah companies as well. He says 80 percent of incentives offered went to Utah-based businesses, and they were able to help get $500 million in government contracts for small companies in this state.
E-mail: mrichards@ksl.com
CONSUMER SPENDING RISES IN JULY
August 30, 2010 – Today in Manufacturing.net
Commerce Department said consumer spending rose 0.4 percent in July after three lackluster months, helped by a jump in demand for automobiles ... continue
JAPAN WANTS TRANSPARENT LABOR RULES IN CHINA
August 30, 2010 – Today in Manufacturing.net
Japan called for 'transparent policies' governing workers in China, saying labor disputes that idled dozens of factories this year were troubling to Japanese companies ... continue
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