Obama Endorses ‘Cash-For-Clunkers’ To Bolster Demand for Autos
President Barack Obama on March 30 endorsed a program under which the U.S. government would provide an incentive for consumers to trade in older cars and buy replacements that are more fuel efficient. This so-called “cash-for-clunkers” program is designed to bolster demand and help protect the environment. In a speech on the U.S. automobile industry, Obama noted that several members of Congress have proposed such programs, and that they have also been successful in boosting auto sales in Europe. “I want to work with Congress to identify parts of the Recovery Act that could be trimmed to fund such a program, and make it retroactive starting today,” he said.
After struggling for years, Boeing Co.’s commercial-satellite manufacturing business appears poised for a lift by snaring what is likely to be a multisatellite order valued at more than $400 million from Intelsat Ltd., according to people familiar with the matter. While no final agreement has been signed, negotiations between Boeing and Intelsat, which has the world’s biggest commercial satellite fleet, have been making steady progress over recent months, these people said. Barring some last-minute snag, a contract for as many as four satellites with an estimated total value between $400 million and $550 million is expected to be signed within the next few weeks.
In March 2009, average hourly earnings in manufacturing were $18.07, unchanged from February 2009 (preliminary), and up 2.56 percent from March 2008’s $17.62.
The average hourly compensation of all manufacturing workers rose 10.1 percent during the fourth quarter of 2008 (from the previous quarter, at an annual rate), reflecting increases in hourly compensation of 10.1 percent in durable goods subsector and 10.1 percent gain in nondurable goods manufacturing.
When the 9.2 percent decrease in consumer prices is taken into account, real hourly compensation in total manufacturing workers advanced 21.2 percent in the fourth quarter, which was the largest increase in the series.
In 2008, hourly compensation of all manufacturing workers grew 4.0 percent, compared to a 3.6 percent increase in the fourth quarter of 2007. Real hourly compensation in the total manufacturing sector rose 0.2 percent in 2008 after increasing by 0.7 percent in 2007.
(BLS/DOL Productivity data from “Productivity and Costs, USDL 09-0116 March 5, 2009,” released March 5, 2009; next release is May 7, 2009)
http://www.bls.gov/news.release/pdf/prod2.pdf
In the fourth quarter of 2008, manufacturing profits decreased 15.2 percent, or $41.4 billion (at an annual rate), to $231.2 billion from $272.6 billion in the third quarter. Compared with fourth quarter profits of 2007, manufacturing profits were down $60.9 billion in the fourth quarter of 2008. Manufacturing profits in 2008 were $76.8 billion less than manufacturing profits in 2007.
Fourth quarter 2008 profits estimates for all non-financial industries (manufacturing being a subcategory) decreased 9.8 percent from the third quarter of 2008 to $825.8 billion.
In March 2009, manufacturing employment fell by 161,000 to 12.3 million from February’s (preliminary) manufacturing employment levels.
In March, durable goods manufacturing lost 125,000 jobs, with decreases in all categories: Fabricated metal products (-27,700), Machinery (-27,000), Primary metals (-8,500), Wood products (-200), Furniture and related products (-10,200), Computer and electronic products (-5,300), Nonmetallic mineral products (-9,300), Electronics equipment and Appliances (-9,000), Transportation Equipment (-25,900) of which Motor vehicles and parts (-17,500), and Miscellaneous manufacturing (-2,100).
In March, nondurable goods manufacturing lost 36,000 jobs. Job losses occurred in almost all categories. Most prominent are Plastics and rubber products (-9,800), Printing and related support activities (-7,900), and Paper and paper products (-3,400), Food manufacturing (-2,800), and Textile mills (-2,000). However, Beverages and tobacco products reported a gain of 1,300 jobs.
The manufacturing employment of 12.3 million workers represents 9.3 percent of total non-farm employment.
In February 2009, manufacturing output fell 0.7 percent and was 13.1 percent below its year-earlier level.
The production index for durable goods declined 1.2 percent. The output of motor vehicles and parts expanded 10.2 percent, and the output of aerospace and miscellaneous transportation increased 0.4 percent. However, all of the other major indexes in this category fell sharply.
The production of nondurable goods decreased 0.4 percent. The output of petroleum and coal products rose 0.7 percent after having fallen in each of the previous three months; the production of food, beverage, and tobacco products edged up 0.1 percent in February; and Chemical production was unchanged from January. Declines, however, were recorded in other major nondurable goods industries.
Industries with notable declines included Textile and product mills (-4.0 percent), Plastics and rubber products (-2.9 percent), and Printing and support (-2.5 percent).
The index for other manufacturing industries (non-NAICS), which consist of publishing and logging, decreased 0.4 percent in February.
In February 2009, manufacturing industries (NAICS based) operated at 67.3 percent of capacity, 12.1 percentage points below their 1972-2008 average of 79.4 percent and 0.5 percentage points lower than their revised capacity utilization in January 2009.
In durable manufacturing, capacity utilization decreased 0.8 percentage points in February from January (revised) to 61.7 percent. This reflects increases in capacity utilization in Motor vehicles and parts (4.1 percent) and Aerospace and miscellaneous transportation equipment (0.2 percent) and declines in Electrical equip., appliances and components (-2.4), Furniture and related products (-2.3), Primary metals (-2.2 percent); Fabricated metal products (-2.1 percent); and Machinery (-2.0 percent), among others.
Capacity utilization in non-durable manufacturing in February moved down 0.3 percentage points from January 2009 (revised) to 73.3 percent. Decreased capacity utilization was registered in Textile and product mills (-2.2 percent), Plastics and rubber products (-2.0 percent); Printing and support (-1.6 percent), Paper (-1.3 percent); and Apparel and leather (-0.9 percent). Increased capacity utilization was registered in Petroleum and coal products (0.7 percent).
Manufacturing productivity decreased 4.0 percent (seasonally adjusted annual rate) in the fourth quarter of 2008, as output dropped 17.7 percent and hours of all persons declined 14.2 percent. The decreases in hours and output were the largest for these series, since the second quarter of 1987. Manufacturing productivity had grown at a 3.7 percent average annual rate from 2000 to 2007 and 1.3 percent increase in 2008.
In the durable goods manufacturing sector, productivity dropped 14.8 percent in the fourth quarter of 2008, as output fell 26.9 percent and hours declined 14.2 percent. These were the largest decreases in productivity, output, and hours for the entire series dating back to second-quarter 1987.
In the nondurable goods sector, productivity rose 7.6 percent in the fourth quarter as hours fell faster than output; output declined 7.7 percent and hours dropped 14.2 percent.
At present the recession and the trend of strong productivity growth are contributing to the decline in manufacturing employment.
(BLS/DOL Productivity data from “Productivity and Costs, USDL 09-0116 March 5, 2009,” released March 5, 2009; next release is May 7, 2009)
http://www.bls.gov/news.release/pdf/prod2.pdf
In January 2009, U.S. manufactured goods exports accounted for 81.7 percent of U.S. goods exports, up from 81.3 percent in January 2008. Compared with January 2008, manufactured goods exports in January 2009 fell 20.9 percent while imports were down 20.2 percent. Despite exports falling by a greater percentage than imports, January 2009’s trade deficit in manufactured goods of $30.0 billion was less than January 2008’s trade deficit of $36.9 billion.
In February 2009, shipments of manufactured durable goods decreased $0.9 billion or 0.5 percent to $179.1 billion, down seven consecutive months. This followed a 5.2 percent January decline. Computers and electronic products, down three of the last four months, had the largest decrease, $0.6 billion or 2.0 percent to $27.9 billion.
Shipments decreased in almost all the major manufactured durable goods categories:
Primary Metals (-1.4 percent), Transportation equipment (-0.8 percent), Fabricated metal products (-0.5 percent), Machinery (-0.02 percent),
However, one industry, Electrical equipment, appliances and components, reported an increase in shipments of 0.5 percent.
In February 2009, the Producer Price Index (PPI) for finished goods, except foods and energy, increased 0.2 percent, after increasing by 0.4 percent in January.
The index for finished energy goods turned up 1.3 percent in February after increasing 3.7 percent a month earlier. The index for gasoline increased 8.7 percent after increasing 15.0 percent in January. The indexes for liquefied petroleum gas, home heating oil, and kerosene turned down after advancing in January. Prices for residential natural gas and diesel fuel decreased more than they had in the prior month.
Conversely, the index for residential electric power increased 0.8 percent in February after rising 0.3 percent a month earlier.
Institute for Supply Management's (ISM) Index updated
“Economic activity in the manufacturing sector failed to grow in March for the 14th consecutive month, and the overall economy contracted for the sixth consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.”
In March 2009, the ISM index (PMI) of manufacturing registered 36.3 percent, 0.5 percentage points higher than the seasonally adjusted 35.8 percent reported in February.
While this is a month-over-month improvement, it is still a sign of continuing weakness in the sector. An index above 50 percent indicates that the manufacturing economy is generally expanding; an index below 50 percent indicates that it is generally contracting.
The percentage-point changes in the components of the PMI in March were: New Orders up 8.1 percent to 41.2, Production was up 0.1 percent to 36.4, Employment up 2.0 to 28.1, Supplier Deliveries down -3.1 percent to 43.6, and Inventories down 4.8 to 32.2.
Prepared by
Office of Trade Industry Information
Manufacturing and Services
International Trade Administration
U.S. Department of Commerce
(202) 482-2460-4691
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