October 4 , 2010Following a neutral report the prior week, last week's economic news was slightly more positive. Of the 11 major indicators, six improved, one slowed and four declined. (To see all of last week's reports, see the Latest Economic Reports section below.)
Unfortunately, much of the positive news was not indicative of a strengthening private-sector recovery. Second quarter GDP growth was revised up slightly, August construction spending rose based on public-sector projects, and personal income accelerated in August due to a resumption of special unemployment insurance rather than a strengthening of wage growth.
Most of the negative news last week concerned the manufacturing sector and added to the mounting evidence that the economy is stuck in low gear.
Most of the negative news last week concerned the manufacturing sector and added to the mounting evidence that the economy is stuck in low gear.
The Institute for Supply Management (ISM) reported last week that its closely-watched manufacturing index fell to 54.4 in September from 56.3 in August (see red line in the chart above.) Manufacturing expanded in September at the slowest pace in 10 months. This shows that the manufacturing sector is decelerating after leading the recovery for the past year.
The ISM manufacturing index has fallen for four of the five months since April, and now stands at its lowest level since last November (see dotted black line in chart). This is a clear sign that the recovery continues to struggle. The transition from economic growth supported by inventory rebuilding and temporary surges from fiscal stimuli to a self-sustaining recovery is rocky. Most of the components of the September report -- such as new orders, production, employment and exports -- all moderated last month, signaling that the slowdown in the manufacturing recovery will spill into the fourth quarter.
Dave Huether
Chief Economist
National Association of Manufacturers
NATIONS WARY OF DEPENDENCE ON CHINA'S RARE EARTHS
China's halt of exotic metal shipments to Japan has reverberated throughout manufacturing hubs -- now on alert to the risks of relying on one country for materials ... continue
WORLDWIDE CHIP SALES JUMP IN AUGUST
Global sales of semiconductors grew nearly 33 percent to $25.7 billion compared with a year ago, the Semiconductor Industry Association said Monday ... continue
BOEING NEWGEN TANKER WIN WOULD BRING 480 JOBS, $22 MILLION TO UTAH
By PR Newswire
SALT LAKE CITY, Oct. 1 /PRNewswire/ -- The Boeing Company today announced that Utah will benefit from an estimated 480 total jobs and generate an estimated $22 million in annual economic impact if the Boeing NewGen Tanker is selected as the U.S. Air Force's next aerial refueling aircraft.
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CITY OF LEHI WELCOMES ADOBE'S NEW TECHNOLOGY CAMPUS IN UTAH
Less than 60 days after Utah Governor Gary R. Herbert and software giant Adobe Systems Incorporated announced Adobe's plans to expand business operations in the beehive state, Adobe has chosen Lehi City's Traverse Mountain as the home of its new technology campus.
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Says U.S. is 'politicizing the problems in China-U.S. relations.' Click to continue
According to the International Warehouse Logistics Association (IWLA), The Miner Safety and Health Act, a bill before the House of Representatives, includes OSHA reform that will affect over 135 million employees -- not just those in the mining industry. Click to continue
MANUFACTURING ACTIVITY UP FOR 14TH STRAIGHT MONTH
Institute for Supply Management said manufacturing activity expanded in September for the 14th straight month, although at the slowest pace since November .... continue
"The timid death of the 'Anti-Outsourcing Bill' in the U.S. Senate this week reminds us of the complete lack of comprehension by so many when it comes to the issue..." Click to continue
CONSUMER SPENDING, INCOMES RISE IN AUGUST
Spending rose moderately in August while incomes increased the most in eight months, a gain propelled by the resumption of extended unemployment benefits ... continue
MIDWEST ECONOMIC SURVEY SHOWS SOME IMPROVEMENT
September survey of supply managers in nine Midwest and Plains states suggests improving economic conditions, according to a report released Friday ... continue
UMA MEMBERS IN THE NEWS:
HOUSE PASSES AMERICA WORKS ACT
The House passed the AMERICA Works Act (H.R. 4072) on September 29 by a vote of 412-10. The NAM-supported bill embraces an important approach toward training that offers opportunities both to manufacturers and manufacturing employees. Each year, the federal government invests billions of dollars in workforce training programs with a limited impact. This bill responds by taking essential steps toward creating a skilled workforce by focusing existing federal workforce training fund resources on nationally-portable, industry recognized credentials, such as those identified in the Manufacturing Institute’s NAM-Endorsed Manufacturing Skills Certification System. Employers rely on workers with the right skills to drive innovation, productivity and global competitiveness. As manufacturers continue to lead the economic recovery and job creation in the United States, they need a skilled workforce. The Manufacturing Skills Certification System provides new and transitioning workers a clear pathway to in-demand skills so they can prepare for good, high-paying jobs in manufacturing. The NAM is urging the Senate to act quickly on this important legislation. Details: Christine Scullion, (202) 637-3133.
CLOTURE FILED ON PAYCHECK FAIRNESS ACT
Before the Senate adjourned on September 29, Majority Leader Reid (D-NV) filed cloture on the Paycheck Fairness Act (S. 3772), setting up a procedural vote on the matter in the Senate when Congress returns for a lame duck session after the mid-term elections. Under the guise of creating gender pay equity, the Paycheck Fairness Act would significantly expand the ability of trial lawyers to sue manufacturers for legitimate pay practices while doing little to prevent actual illegal acts of pay discrimination. This legislation would create a complex system of litigation for allegations of gender discrimination and would force employers to second-guess almost every pay decision they make. This bill also would allow the government to collect data from private-sector businesses and could potentially make employee salaries public. Click here to contact your senators to urge them to oppose the proposal. Details: Keith Smith, (202) 637-3045.
GRANDFATHER RULE DISAPPROVAL FAILS IN SENATE
Last week, Sen. Enzi (R-WY) introduced S.J. Res 39, a resolution of disapproval regarding the so-called Grandfather Rule, recently issued by the Department of Health and Human Services (HHS) to implement the health reform bill enacted this year. The rule outlines what changes employer or health plans can make in their benefits, cost-sharing, co-payments and premiums while retaining grandfathered status. The NAM submitted comments on the rule to the HHS indicating our belief that the rule is too restrictive and does not meet the promise or expectation employers had about the ability to keep a plan if they choose. The resolution of disapproval failed in the Senate on a party line vote of 59-40. If an employer or health plan does not meet or chooses to forgo grandfathered status, it must meet all new requirements under the health reform law, such as a ban on lifetime limits, restrictions on annual dollar limits and coverage of preventive benefits without a co-pay requirement. Details: Christine Scullion, (202) 637-3133.
The NAM sent a letter September 27 to the full Senate noting that a vote on S. 3816 may be considered a key manufacturing vote. The letter stated: “American companies with worldwide operations support and create U.S. jobs. They employ 22 million Americans (19 percent of the workforce) and 53 percent of all U.S. manufacturing workers and are responsible for 51 percent of exports. U.S. firms establish operations abroad in order to penetrate foreign markets and add new customers. In many cases, a U.S. manufacturer cannot sell to foreign customers if the company does not have a local plant in that foreign country.” Details: Dorothy Coleman, (202) 637-3077.
SAVE OUR SECRET BALLOT- VOTE FOR CONSTITUTION AMENDMENT A
October 4, 2010 – The Utah Taxpayer
(Note: UMA joined the Utah Taxpayers Association and a host of other business interests in passing this legislation to put “card check” on the ballot for this November election. This is a top priority for UMA and is critical to manufacturers throughout the state. This is a top priority for the National Association of Manufacturers as well.)
Political analysts are forecasting upheaval in Washington this November as Democrats lose dozens of seats in Congress and majority control. As a result, labor union bosses are realizing it is “now or never” and are anxious to push card-check legislation through a “lame duck” session of Congress right after the November elections.
Democratic leadership has already scheduled the “lame duck” session of Congress to start November 15th and the Employee Free Choice Act, also known as card check, has previously passed the House of Representatives. Card check legislation would eliminate secret ballot voting in employee representation elections. This means that any business with ten or more employees could be unionized without an election.
The Free Employee Choice Act, better known as card check, would allow union representatives to gather signatures from employees at any time or place in support of unionization, without oversight or supervision. No election or notification to employees would be required. Even if employees asked for a secret ballot election, unions would not have to honor their request. If union representatives gathered signatures from 50 percent of workers the business would unionized.
Secret ballots and elections are a basic tenant of democracy. In the case of unionization, secret ballots allow for private decision making apart from voter coercion, union intimidation or peer pressure. Without a secret ballot, unions could pressure employees into supporting unionization. Secret ballots are essential to protecting worker’s ability to make choices in the best interest of themselves and their business.
For 75 years, federal law has protected the right for workers to have a secret ballot. Constitution Amendment A on Utah’s November ballot will preserve this right and make all ballots private in local, state, federal and union representation elections.
Since the federal courts are still honoring state’s rights on election matters, Utah (and other states) are pre-empting federal card check legislation with a proposed amendment to the Utah Constitution that guarantees secret ballots in all Utah elections, including employee representation. The Utah Constitution Amendment A would read, “All elections, including elections under state or federal law for public office, on an initiative or referendum, or to designate or authorize employee representation or individual representation, shall be by secret ballot.”
Even with the impending “lame duck” session, unions are going a step further and taking card check regulations into their own hands. The National Labor Relations Board (NLRB), the federal agency charged with conducting elections for labor unions, is trying to assume the authority to enact card-check regulations that thwart secret ballots. The Save Our Secret Ballot constitutional amendment is the best way to protect against “lame duck” legislation and new bureaucratic “card check” power grabs by the NLRB.
States that enact the Save Our Secret Ballot amendment this November, such as Utah’s Constitution Amendment A, will have the power to prevent the NLRB from imposing card check and violating the right to a secret ballot. An overwhelming majority of Utahns support the right to a secret ballot. A 2009 poll conducted by WRS found that 83 percent of Utahns support secret ballots and that the majority of voters from Democratic, Republican and Independent political parties, support secret ballots.
Utah has the opportunity to amend its Constitution to protect itself from potential card check legislation this fall and NLRB card check bureaucracy and decrees. Constitution Amendment A is essential to protecting democracy in Utah and deserves to be ratified by voters in November.
(Note: UMA joined the Utah Taxpayers Association and a host of other business interests in passing this legislation to put “card check” on the ballot for this November election. This is a top priority for UMA and is critical to manufacturers throughout the state. This is a top priority for the National Association of Manufacturers as well.)
Political analysts are forecasting upheaval in Washington this November as Democrats lose dozens of seats in Congress and majority control. As a result, labor union bosses are realizing it is “now or never” and are anxious to push card-check legislation through a “lame duck” session of Congress right after the November elections.
Democratic leadership has already scheduled the “lame duck” session of Congress to start November 15th and the Employee Free Choice Act, also known as card check, has previously passed the House of Representatives. Card check legislation would eliminate secret ballot voting in employee representation elections. This means that any business with ten or more employees could be unionized without an election.
The Free Employee Choice Act, better known as card check, would allow union representatives to gather signatures from employees at any time or place in support of unionization, without oversight or supervision. No election or notification to employees would be required. Even if employees asked for a secret ballot election, unions would not have to honor their request. If union representatives gathered signatures from 50 percent of workers the business would unionized.
Secret ballots and elections are a basic tenant of democracy. In the case of unionization, secret ballots allow for private decision making apart from voter coercion, union intimidation or peer pressure. Without a secret ballot, unions could pressure employees into supporting unionization. Secret ballots are essential to protecting worker’s ability to make choices in the best interest of themselves and their business.
For 75 years, federal law has protected the right for workers to have a secret ballot. Constitution Amendment A on Utah’s November ballot will preserve this right and make all ballots private in local, state, federal and union representation elections.
Since the federal courts are still honoring state’s rights on election matters, Utah (and other states) are pre-empting federal card check legislation with a proposed amendment to the Utah Constitution that guarantees secret ballots in all Utah elections, including employee representation. The Utah Constitution Amendment A would read, “All elections, including elections under state or federal law for public office, on an initiative or referendum, or to designate or authorize employee representation or individual representation, shall be by secret ballot.”
Even with the impending “lame duck” session, unions are going a step further and taking card check regulations into their own hands. The National Labor Relations Board (NLRB), the federal agency charged with conducting elections for labor unions, is trying to assume the authority to enact card-check regulations that thwart secret ballots. The Save Our Secret Ballot constitutional amendment is the best way to protect against “lame duck” legislation and new bureaucratic “card check” power grabs by the NLRB.
States that enact the Save Our Secret Ballot amendment this November, such as Utah’s Constitution Amendment A, will have the power to prevent the NLRB from imposing card check and violating the right to a secret ballot. An overwhelming majority of Utahns support the right to a secret ballot. A 2009 poll conducted by WRS found that 83 percent of Utahns support secret ballots and that the majority of voters from Democratic, Republican and Independent political parties, support secret ballots.
Utah has the opportunity to amend its Constitution to protect itself from potential card check legislation this fall and NLRB card check bureaucracy and decrees. Constitution Amendment A is essential to protecting democracy in Utah and deserves to be ratified by voters in November.
NATIONS WARY OF DEPENDENCE ON CHINA'S RARE EARTHS
China's halt of exotic metal shipments to Japan has reverberated throughout manufacturing hubs -- now on alert to the risks of relying on one country for materials ... continue
WORLDWIDE CHIP SALES JUMP IN AUGUST
BOEING NEWGEN TANKER WIN WOULD BRING 480 JOBS, $22 MILLION TO UTAH
SALT LAKE CITY, Oct. 1 /PRNewswire/ -- The Boeing Company today announced that Utah will benefit from an estimated 480 total jobs and generate an estimated $22 million in annual economic impact if the Boeing NewGen Tanker is selected as the U.S. Air Force's next aerial refueling aircraft.
{read more}
CITY OF LEHI WELCOMES ADOBE'S NEW TECHNOLOGY CAMPUS IN UTAH
{read more}
Says U.S. is 'politicizing the problems in China-U.S. relations.' Click to continue
According to the International Warehouse Logistics Association (IWLA), The Miner Safety and Health Act, a bill before the House of Representatives, includes OSHA reform that will affect over 135 million employees -- not just those in the mining industry. Click to continue
MANUFACTURING ACTIVITY UP FOR 14TH STRAIGHT MONTH
"The timid death of the 'Anti-Outsourcing Bill' in the U.S. Senate this week reminds us of the complete lack of comprehension by so many when it comes to the issue..." Click to continue
CONSUMER SPENDING, INCOMES RISE IN AUGUST
MIDWEST ECONOMIC SURVEY SHOWS SOME IMPROVEMENT
UMA MEMBERS IN THE NEWS:
NELSON LABORATORIES RECOGNIZED FOR EXEMPLARY WORKPLACE PRACTICES
Nelson Laboratories announced today that it has been honored with the 2010 Alfred P. Sloan Award for Business Excellence in Workplace Flexibility.
{read more}
Nelson Laboratories announced today that it has been honored with the 2010 Alfred P. Sloan Award for Business Excellence in Workplace Flexibility.
{read more}
HOUSE PASSES AMERICA WORKS ACT
CLOTURE FILED ON PAYCHECK FAIRNESS ACT
Before the Senate adjourned on September 29, Majority Leader Reid (D-NV) filed cloture on the Paycheck Fairness Act (S. 3772), setting up a procedural vote on the matter in the Senate when Congress returns for a lame duck session after the mid-term elections. Under the guise of creating gender pay equity, the Paycheck Fairness Act would significantly expand the ability of trial lawyers to sue manufacturers for legitimate pay practices while doing little to prevent actual illegal acts of pay discrimination. This legislation would create a complex system of litigation for allegations of gender discrimination and would force employers to second-guess almost every pay decision they make. This bill also would allow the government to collect data from private-sector businesses and could potentially make employee salaries public. Click here to contact your senators to urge them to oppose the proposal. Details: Keith Smith, (202) 637-3045.
GRANDFATHER RULE DISAPPROVAL FAILS IN SENATE
MANUFACTURERS RESPOND TO INTRODUCTION OF SHIPPING ACT
House Transportation and Infrastructure Committee Chairman Oberstar (D-MN) last week introduced ocean shipping reform legislation with the Shipping Act of 2010 (H.R. 6167), intended to help alleviate mounting challenges manufacturers and shippers face in moving products by ocean liner services engaged in the international trades. Among other issues related to strengthening the oversight role of the Federal Maritime Commission (FMC), the legislation seeks to address service issues, unreasonable surcharges and contract breaches that have impacted the shipper community. As the NAM seeks policies that help achieve our nation’s export goals, the NAM supports efforts to reform ocean liner shipping laws and communicated its support to Chairman Oberstar in a letter shortly after the legislation was introduced. Details: Robyn Boerstling, (202) 637-3178.SENATE VOTE DERAILS NAM-OPPOSED TAX INCREASES
Senate Majority Leader Reid (D-NV) failed on September 28 to garner the 60 votes needed to end debate on the “Creating American Jobs and Ending Offshoring Act” (S. 3816) in a 53 to 45 cloture vote. While the bill would provide payroll tax relief for employers that hire U.S. workers to replace a company worker overseas, the bill also includes tax increases on U.S. companies with worldwide operations. Specifically, the bill would disallow tax deductions and credits for any costs associated with closing a facility in the United States and opening a similar facility overseas. The proposal also would limit deferral for U.S. companies that move production overseas and import products back to the United States. The tax increases could impact a wide range of U.S. multinationals and represent another attack on the U.S. international tax regime.The NAM sent a letter September 27 to the full Senate noting that a vote on S. 3816 may be considered a key manufacturing vote. The letter stated: “American companies with worldwide operations support and create U.S. jobs. They employ 22 million Americans (19 percent of the workforce) and 53 percent of all U.S. manufacturing workers and are responsible for 51 percent of exports. U.S. firms establish operations abroad in order to penetrate foreign markets and add new customers. In many cases, a U.S. manufacturer cannot sell to foreign customers if the company does not have a local plant in that foreign country.” Details: Dorothy Coleman, (202) 637-3077.
SMMS WILL BENEFIT FROM NEW LAW WITH BUSINESS INVESTMENT INCENTIVES
The President signed the small business jobs bill H.R. 5297 into law September 27, which includes an NAM-advocated provision that temporarily extends bonus depreciation through 2010 for all size companies. Specifically, this tax relief will allow faster capital cost recovery of business investments by permitting businesses to immediately write-off in the first year 50 percent of the cost of depreciable property purchased and placed in service anytime in 2010. Also included is an NAM-supported provision to increase Section 179 expensing by increasing the expense limitation to $500,000 with a phase-out threshold of $2 million for years 2010 and 2011. Click here for an explanation of both provisions, prepared by Deloitte. Details: Monica McGuire, (202) 637-3076.
CHINA WARNS U.S. THREATS ON YUAN COULD HURT TRADE TIES
Congress proposes empowering Commerce Department to slap retaliatory tariffs on Chinese goods. Click to continue 
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