Positive Portents

By February 18, 2010Economy

Wall Street Journal, “Factories Get Set to Hire“:

Manufacturers are seeing more signs that the U.S. economic recovery is on a solid footing, opening the way for new hiring as well as call-backs for factory workers laid off during the depths of the recession.

Caterpillar Inc., the Peoria, Ill.-based heavy-equipment maker, has brought back 600 workers in the past 60 days, including 100 recalled to an engine plant in Indiana last week. Allen Edmonds Shoe Corp. has been relying on overtime to meet growing demand, but is now preparing to start adding new workers at its U.S. plants in coming weeks.

The Federal Reserve said Wednesday that industrial production, which includes utility and mining output, as well as manufacturing, rose 0.9% in January, the seventh straight monthly increase. Factory output rose a solid 1%, with improvement across a wide range of industries, including apparel and appliances. Output of motor vehicles and parts was particularly strong, rising 4.9%, which economists attributed to pent-up demand and government incentives that fueled traffic to dealers.

From informal conversations with NAM member companies, we do get a sense that employers are starting to consider the possibility of being hopeful in the recovery. David Huether, the NAM’s chief economist, commented on the latest Federal Reserve’s industrial production numbers on Wednesday, “While recent signs are encouraging, the recovery is unlikely to be sustainable at this rapid pace as much of it was driven by short-term inventory and one-time government spending.”

The Fed’s news release is here.

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