December 27, 2010
Closely mirroring the prior week, last week's economic indicators were largely positive. Of the seven major reports last week, five accelerated, one grew more slowly and one declined. (To see all of last week's reports, see the Latest Economic Reports section below.)
It is important to note that the one declining indicator was a November report on durable manufacturing orders. The decline was the result of a large plunge in transportation orders, which are extremely volatile from month to month. Outside of transportation, gains in orders for big-ticket items continued their momentum over the past several months after decelerating in the third quarter.
The Commerce Department's final report on third quarter GDP growth came out last week and showed that the economy grew slightly faster than previously estimated (2.6 percent compared to the prior 2.5 percent). As the chart above shows, after declining from the fourth quarter of 2007 to the second quarter of 2009 (see blue line in the chart), the economy grew for five consecutive quarters.
After decelerating from the fourth quarter of 2009 to the second quarter of 2010, GDP accelerated moderately in the third quarter (see red and green bars in the chart). Even after growing 3.7 percent since the second quarter of 2009, the economy still has not reached its pre-recession peak, remaining 0.6 percent below its fourth quarter 2007 level (see dotted black line). This makes the current recovery (the time of positive economic growth from the end of a recession to its prior peak) the longest since the Great Depression.
Dave Huether
Chief Economist
National Association of Manufacturers
EPA MOVING UNILATERALLY TO LIMIT GREENHOUSE GASES
Merrill Hartson - Associated PressWASHINGTON — The Obama administration took separate actions this week to protect clean air and federal wilderness areas, reaffirming that the White House can pursue its goals without depending on help from an increasingly combative Congress.
In the coming two years, that may become a more popular approach.
In a statement posted on its website late Thursday, the Environmental Protection Agency announced it is moving unilaterally to clamp down on power plant and oil refinery greenhouse emissions, announcing plans for developing new standards over the next year.
EPA administrator Lisa Jackson said the aim was to better cope with pollution contributing to climate change.
"We are following through on our commitment to proceed in a measured and careful way to reduce GHG pollution that threatens the health and welfare of Americans," Jackson said in a statement. She said emissions from power plants and oil refineries constitute about 40 percent of the greenhouse gas pollution in this country.
President Barack Obama had said two days after the midterm elections that he was disappointed Congress hadn't acted on legislation achieving the same end, signaling that other options were under consideration.
Jackson's announcement came on the same day that the administration showed a go-it-alone approach on federal wilderness protection — another major environmental issue. Interior Secretary Ken Salazar said his agency was repealing the Bush era's policy limiting wilderness protection, which was adopted under former Interior Secretary Gale Norton.
On climate change, legislation in Congress putting a limit on heat-trapping greenhouse gases and allowing companies to buy and sell pollution permits under that ceiling — a system known as "cap and trade" — stalled in the Senate earlier this year after narrowly clearing the House.
Republicans assailed it as "cap and tax," arguing that it would raise energy prices.
But the Senate in late June rejected by a 53-47 vote a challenge brought by Alaska Republican Lisa Murkowski that would have denied the EPA the authority to move ahead with the rules.
Jackson noted in Thursday's statement by her agency that several state and local governments and environmental groups had sued EPA over the agency's failure to update or publish new standards for fossil fuel plants and petroleum refineries. The announcement Thursday came in connection with a settlement of the suit the states brought against the EPA.
The EPA also announced Thursday that it was taking the unprecedented step of directly issuing air permits to industries in Texas, citing the state's unwillingness to comply with greenhouse gas regulations going into effect Jan. 2. EPA officials said they reluctantly were taking over Clean Air Act Permits for greenhouse gas emissions because "officials in Texas have made clear . they have no intention of implementing this portion of the federal air permitting program."
Two days after the midterm elections, Obama served notice that he would look for ways to control global warming pollution other than Congress placing a ceiling on it.
"Cap-and-trade was just one way of skinning the cat; it was not the only way," he said. "I'm going to be looking for other means to address this problem."
The EPA was at the center of the battle in Congress over climate change policy, especially in the wake of a 2007 Supreme Court ruling giving the agency the authority to regulate heat-trapping gases.
"While there will be attacks on (EPA's) authority, it is important that there not be any surrender on EPA's ability to do the job," Trip Van Noppen, president of the environmental group Earthjustice, said earlier this year.
The EPA moved against climate change on another front earlier this year, issuing the first-ever federal guidelines for reducing greenhouse emissions from industrial sources. On Nov. 10, the agency sent new guidelines to states. It suggested that dirty fuel used to power oil refineries be replaced with cleaner sources and it called for more efficient electricity and energy use with existing nuclear power plants.
In Thursday's announcement, Jackson said that under an agreement associated with the court suit, EPA will propose standards for power plants in July 2011 and refineries in December 2011 and will issue final standards in May and November 2012, respectively.
In this time, the agency will schedule "listening sessions" with representatives of business and local governments, ahead of the formal rule-making process.
Quick Manufacturing News
Overall, 61% of those with sustainability programs found that, despite some increase in investment, the benefits clearly outweigh the drawbacks. This rose to 72% among the very largest companies, with revenues above $5 billion. Click to continue
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