May 16, 2011
Growth in the manufacturing sector remains at the top of the news. Much of the focus has been on manufacturing's strong production gains as outlined in past Monday Economic Reports. In addition, a study from the Boston Consulting Group found that the United States is expected to experience a "manufacturing renaissance" in the coming years. In discussing this study, a Washington Post editorial touted the U.S. manufacturing sector and its ability to generate new foreign investment and employment. It is good news that the contributions of the manufacturing sector are leading the news, both in the current economic environment and moving forward.
The economic news last week centered on two areas: international trade and inflation. On the trade front, while the U.S. trade deficit widened in March, manufactured goods exports rose an annualized 4.5 percent for the month, or 14.5 percent from last year. Two-thirds of the growth in non-petroleum exports for the month was due to manufactured goods, illustrating how important the sector is for achieving the nation's goal of doubling exports by 2015. Meanwhile, the cost of imported goods rose 2.2 percent in April, mostly due to significantly higher petroleum costs. (The decline in per-barrel petroleum costs that occurred in futures markets this week will not show up in the statistics until May numbers are released.)
In terms of inflation, producer prices remain elevated, as the chart above shows, with the overall producer price index (PPI) up 0.8 percent in April. Core inflation at the producer level, which excludes food and energy prices, was up more modestly at 0.3 percent. From the manufacturing perspective, higher costs for raw materials and energy are taking a toll, with the PPI for manufacturers up 8.5 percent since last year. Consumers, meanwhile, continue to be squeezed by higher food and energy costs. The CPI rose 0.4 percent in April, or 0.2 percent excluding food and energy prices.
This week, we will follow a few key indicators of manufacturing output, including industrial production and capacity utilization figures from the Federal Reserve Board and regional surveys from the New York and Philadelphia Federal Reserve Banks. Recent numbers have indicated a slight "cooling" in April, and we will see if the newer figures bear this out. The overall picture for manufacturing, though, remains a positive one.
Chad Moutray
Chief Economist
National Association of Manufacturers
Growth in the manufacturing sector remains at the top of the news. Much of the focus has been on manufacturing's strong production gains as outlined in past Monday Economic Reports. In addition, a study from the Boston Consulting Group found that the United States is expected to experience a "manufacturing renaissance" in the coming years. In discussing this study, a Washington Post editorial touted the U.S. manufacturing sector and its ability to generate new foreign investment and employment. It is good news that the contributions of the manufacturing sector are leading the news, both in the current economic environment and moving forward.
The economic news last week centered on two areas: international trade and inflation. On the trade front, while the U.S. trade deficit widened in March, manufactured goods exports rose an annualized 4.5 percent for the month, or 14.5 percent from last year. Two-thirds of the growth in non-petroleum exports for the month was due to manufactured goods, illustrating how important the sector is for achieving the nation's goal of doubling exports by 2015. Meanwhile, the cost of imported goods rose 2.2 percent in April, mostly due to significantly higher petroleum costs. (The decline in per-barrel petroleum costs that occurred in futures markets this week will not show up in the statistics until May numbers are released.)
In terms of inflation, producer prices remain elevated, as the chart above shows, with the overall producer price index (PPI) up 0.8 percent in April. Core inflation at the producer level, which excludes food and energy prices, was up more modestly at 0.3 percent. From the manufacturing perspective, higher costs for raw materials and energy are taking a toll, with the PPI for manufacturers up 8.5 percent since last year. Consumers, meanwhile, continue to be squeezed by higher food and energy costs. The CPI rose 0.4 percent in April, or 0.2 percent excluding food and energy prices.
This week, we will follow a few key indicators of manufacturing output, including industrial production and capacity utilization figures from the Federal Reserve Board and regional surveys from the New York and Philadelphia Federal Reserve Banks. Recent numbers have indicated a slight "cooling" in April, and we will see if the newer figures bear this out. The overall picture for manufacturing, though, remains a positive one.
Chad Moutray
Chief Economist
National Association of Manufacturers
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TESTIMONY OF MIKE ROWE
Creator, Executive Producer and Host, Dirty Jobs(Mike Rowe's Testimony before the U.S. Senate Committee on Commerce, Science and Transportation May 11, 2011)
Chairman Rockefeller, Ranking Member Hutchison and members of this committee, my name is Mike Rowe, and I want to thank you all very much for the opportunity to testify before you today.
I'm here today because of my grandfather. His name was Carl Knobel, and he made his living in Baltimore as a master electrician. He was also a plumber, a mechanic, a mason, and a carpenter. Everyone knew him as a jack-of-all-trades. I knew him as a magician.
For most of his life, my grandfather woke up clean and came home dirty. In between, he accomplished things that were nothing short of miraculous. Some days he might re-shingle a roof. Or rebuild a motor. Or maybe run electricity out to our barn. He helped build the church I went to as a kid, and the farmhouse my brothers and I grew up in. He could fix or build anything, but to my knowledge he never once read the directions. He just knew how stuff worked.
I remember one Saturday morning when I was 12. I flushed the toilet in the same way I always had. The toilet however, responded in a way that was completely out of character. There was a rumbling sound, followed by a distant gurgle. Then, everything that had gone down reappeared in a rather violent and spectacular fashion.
Naturally, my grandfather was called in to investigate, and within the hour I was invited to join he and my dad in the front yard with picks and shovels. By lunch, the lawn was littered with fragments of old pipe and mounds of dirt. There was welding and pipe-fitting, blisters and laughter, and maybe some questionable language. By sunset we were completely filthy. But a new pipe was installed, the dirt was back in the hole, and our toilet was back on its best behavior.
It was one of my favorite days ever.
Thirty years later in San Francisco when my toilet blew up again. This time, I didn't participate in the repair process. I just called my landlord, left a check on the kitchen counter, and went to work. When I got home, the mess was cleaned up and the problem was solved. As for the actual plumber who did the work, I never even met him.
It occurred to me that I had become disconnected from a lot of things that used to fascinate me. I no longer thought about where my food came from, or how my electricity worked, or who fixed my pipes, or who made my clothes. There was no reason to. I had become less interested in how things got made, and more interested in how things got bought.
At this point my grandfather was well into his 80s, and after a long visit with him one weekend, I decided to do a TV show in his honor. Today, Dirty Jobs is still on the air, and I am here before this committee, hoping to say something useful. So, here it is.
I believe we need a national PR Campaign for Skilled Labor. A big one; something that addresses the widening skills gap head on, and reconnects the country with the most important part of our workforce.
Right now, American manufacturing is struggling to fill 200,000 vacant positions. There are 450,000 openings in trades, transportation and utilities. The skills gap is real, and it's getting wider. In Alabama, a third of all skilled tradesmen are over 55. They're retiring fast, and no one is there to replace them.
Alabama's not alone. A few months ago in Atlanta I ran into Tom Vilsack, our Secretary of Agriculture. Tom told me about a governor who was unable to move forward on the construction of a power plant. The reason was telling. It wasn't a lack of funds. It wasn't a lack of support. It was a lack of qualified welders.
In general, we're surprised that high unemployment can exist at the same time as a skilled labor shortage. We shouldn't be. We've pretty much guaranteed it.
In high schools, the vocational arts have all but vanished. We've elevated the importance of "higher education" to such a lofty perch that all other forms of knowledge are now labeled "alternative." Millions of parents and kids see apprenticeships and on-the-job-training opportunities as "vocational consolation prizes," best suited for those not cut out for a four-year degree. And still, we talk about millions of "shovel ready" jobs for a society that doesn't encourage people to pick up a shovel.
In a hundred different ways, we have slowly marginalized an entire category of critical professions, reshaping our expectations of a "good job" into something that no longer looks like work. A few years from now, an hour with a good plumber – if you can find one – is going to cost more than an hour with a good psychiatrist. At which point we'll all be in need of both.
I came here today because guys like my grandfather are no less important to civilized life than they were 50 years ago. Maybe they're in short supply because we don't acknowledge them they way we used to. We leave our check on the kitchen counter, and hope the work gets done. That needs to change.
My written testimony includes the details of several initiatives designed to close the skills gap, all of which I've had the privilege to participate in. Go Build Alabama, I Make America, and my own modest efforts through Dirty Jobs and mikeroweWORKS. I'm especially proud to announce
"Discover Your Skills," a broad-based initiative from Discovery Communications that I believe can change perceptions in a meaningful way.
I encourage you to support these efforts, because closing the skills gap doesn't just benefit future
tradesmen and the companies desperate to hire them. It benefits people like me, and anyone else who shares my addiction to paved roads, reliable bridges, heating, air conditioning, and indoor plumbing. The skills gap is a reflection of what we value. To close the gap, we need to change the way the country feels about work
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