The Conference Board said that the Leading Economic Index (LEI) rose 0.6 percent in November, extending the 0.6 percent increase in October. The LEI has grown 3.6 percent over the past six months, hopefully predicting healthy growth in the U.S. economy over the coming months. In November, strength in manufacturing new orders was one of the larger contributors to the LEI, adding 0.21 percentage points to the headline figure. Other positive elements included the average workweek for production workers, the stock market, consumer confidence, favorable credit conditions and the interest rate spread. (continue reading…)
The Federal Reserve Bank of Philadelphia said that manufacturing activity remained strong in December. While the composite index dropped from 40.8 in November to 24.5 in December, that figure continues to reflect healthy gains in demand and output. The November data points were outliers in terms of their strength, with December’s report reflecting figures that were closer to the average of the second half of 2014 (27.0). Manufacturers in the Philly Fed region have cited marked improvements since the first half, when the composite index contracted in February and averaged just 10.3 over the first six months of the year. (continue reading…)
This week, New York Governor Andrew Cuomo shocked many (including us) when he announced a complete ban on natural gas exploration through hydraulic fracturing within New York’s borders. While authority to regulate hydraulic fracturing belongs to the state, it’s hard to understand today’s decision. (continue reading…)
The Federal Open Market Committee (FOMC) said that it can be “patient” in normalizing rates. The participants at its December 16–17 meeting cited progress in the overall economy, including “solid [labor market] gains and a lower unemployment rate.” Moreover, the Fed noted better consumer and business spending, with a moderate pace of economic growth overall. At the same time, the housing market’s recovery has been slow, and despite recent progress, labor markets remain underutilized. (continue reading…)
The Bureau of Labor Statistics said that the consumer price index (CPI) decreased by 0.3 percent in November. More importantly, consumer inflation has increased 1.3 percent over the past 12 months, down from 2.1 percent in May and 1.7 percent in October. In addition, core prices, which exclude food and energy costs, were up 1.7 percent in November, down from 1.8 percent the month before. As such, core inflation continues to remain below the Federal Reserve’s stated goal of 2 percent at the annual rate, which it has now done for 21 consecutive months. Overall, these trends mirror the producer price index data released earlier in the week.
Lower energy costs have helped to decelerate pricing pressures, with petroleum costs down sharply since June. The energy component of CPI has fallen 9.0 percent since June, for instance, with gasoline costs down 14.3 percent. Indeed, we have seen the average price of regular gasoline decline from $3.64 a gallon during the week of June 23 to $2.50 a gallon this week, according to the Energy Information Administration. (continue reading…)
The Growing Trend of Unattainable Regulations
The Clean Air Act has been a successful environmental statute. Air quality has improved across the United States and our economy has continued to grow. Using ozone and ozone precursor emissions as an example, since 1990:
- Highway vehicle NOX emissions are down 48 percent and VOC emissions are down 30 percent, while an additional 60 million vehicles have been added to U.S. roadways over the same time period.
- Manufacturers’ NOX emissions are down 52 percent and our VOC emissions have been reduced by 70 percent, while our value added to the economy has more than doubled.
- As a country, ozone levels are down nearly 25 percent and our economy has grown by 43 percent. (continue reading…)
In addition to keeping the federal government funded, the recent omnibus appropriations package (H.R. 83) included an important provision that will give manufacturers more certainty on how changes to business operations can impact their pension plans.
Section 4062e of the Employee Retirement Income Security Act (ERISA) was intended to protect pension plan participants in the event that a company closes a plant or facility and must substantially reduce its workforce. Unfortunately, the best of intentions can sometimes lead to unintended consequences as manufacturers soon faced unnecessary enforcement of Section 4062(e) pension liability payments even if it was not clear that a triggering event had occurred. In some cases, companies that simply transferred workers from a closing plant to another facility were faced with having to pull millions of dollars out of productive business investments in order to unexpectedly increase contributions to their pension plan as a result of 4062(e). (continue reading…)
In a case in which NAM filed an amicus brief, a sharply divided NLRB issued a 3-2 decision in Babcock & Wilcox on Monday, December 15 shortly before the expiration of Board Member Nancy Schiffer’s term. The Board revised its traditional standard for Board deferral to arbitration in cases alleging discrimination against employees, making it more difficult for the parties to rely on arbitration in lieu of litigation before the Board and undermining federal policy encouraging the voluntary settlement of labor disputes. Members Miscimarra and Johnson filed separate dissents. The changed deferral standard will have a damaging effect on final and binding arbitration. (continue reading…)
The Chinese economy continues to slow, with the HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) contracting for the first time since May. The headline index declined from 50.0 in November to 49.5 in December. New orders (down from 51.3 to 49.6), output (up from 49.6 to 49.7) and employment (up from 48.7 to 48.9) were below 50 – the threshold signifying reduced activity – in December, with production declining for the second straight month. On the positive side, new export orders (up from 51.1 to 51.7) were still growing somewhat modestly. As such, this report suggests that the Chinese economy is ending 2014 much as it began it, with softness in the manufacturing sector. (continue reading…)
USTR Gives India’s Weak IP Policies a Pass
India got a pass when the Office of the U.S. Trade Representative (USTR) dropped its out-of-cycle review of that country’s abysmal IP regime, which consistently ranks as one of the very worst in the world.
The NAM and its partners in the Alliance for Fair Trade with India have long called for concrete action to address the threat of India’s deteriorating intellectual property environment and other discriminatory policies to manufacturing and jobs in the United States. (continue reading…)