Cost Consideration: Supreme Court Hears Arguments in Michigan v. EPA

Today the Supreme Court hears arguments in Michigan v. EPA, to resolve whether the Environmental Protection Agency (EPA) must consider costs when deciding whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities.

It’s surprising that an agency would not consider costs when deciding how to regulate. We could make cars safer by requiring that they be made like tanks. We could reduce hospital infections by requiring hazmat-style protective equipment.  But alternatives like these are usually not appropriate. It is more reasonable to approach every regulation by weighing its unique costs and benefits. (continue reading…)

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Durable Goods Orders and Shipments Were Soft in February

The Census Bureau said that new durable goods orders declined 1.4 percent in February, falling for the fifth time in the past seven months. Much of the decrease in February stemmed from reductions in the demand for transportation equipment, with new orders in that sector down 3.5 percent in February. This included a reduction in sales for motor vehicles and parts (down 0.5 percent for the month) and fewer nondefense and defense aircraft orders (down 8.9 percent and 33.1 percent, respectively). Note that aircraft orders can be quite volatile from month to month, as nondefense aircraft orders had increased 122.2 percent in January. Therefore, we often look at this data by stripping out the transportation equipment sector, and when you do so, durable goods orders decreased by 0.4 percent – still a soft figure. This mirrors other data showing a number of headwinds dampening demand and output in the early months of 2015. (continue reading…)

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The Economic Development and Jobs Growth Tool the Anti-Trade Lobby Loves to Hate; Why ISDS Deserves More than a Little Respect

Clean water in Mexico, new solar energy production in the Czech Republic, food production in Zimbabwe, and energy production in South America. All these are examples of how private entrepreneurial investment from one country to another has the capacity to improve peoples’ lives. (continue reading…)

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Expanding America’s Global Opportunities – Hannover Messe 2016

This evening, business leaders and policymakers will attend the signing of the Memorandum of Understanding (MOU) naming the United States as the Hannover Messe partner country for 2016. Hannover Messe is the world’s largest industrial trade fair, held annually in Hanover, Germany. (continue reading…)

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Manufacturers IoT Innovations Showcased on Capitol Hill

The United States House of Representatives Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade hosted an Internet of Things showcase on Capitol Hill today. The showcase was followed by a hearing in the Commerce, Manufacturing and Trade Subcommittee called “The Internet of Things: Exploring the Next Technology Frontier.” NAM members companies Toyota, BigAssSolutions and Corning were front and center at both events sharing with Members of Congress and the general public the transformative impact the IoT will have on our industry.

Big Ass Solutions was one of the demonstrators that brought their technology in from Kentucky to share with lawmakers how the IoT is driving solutions for their customers – and saving them money on their utility bills. ABB shared with Members of Congress its Asset Health Center which allows utilities to leverage new smart grid technology investments. Toyota highlighted the features of its Lexus Enform connected services which enhance the driver experience with new navigation, safety, and maintenance features. Fiber optic manufacturer Corning, Inc. displayed how their latest technology is connecting the IoT and helping to  deliver big data to every corner of the manufacturing supply chain. (continue reading…)

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Richmond Fed: Manufacturing Activity Contracted in March

The Richmond Federal Reserve Bank said that manufacturing activity contracted in March, declining for the first time in 12 months. The composite index of general business conditions decreased from zero in February to -8 in March. The underlying data were lower across-the-board, reflecting weaknesses for the month in terms of overall activity and a deterioration from February’s numbers. This included new orders (down from -2 to -13), shipments (down from -1 to -13), capacity utilization (down from -4 to -7) and the average workweek (up from -6 to -4). As such, manufacturers clearly pulled back in a number of areas for the month, likely due to global slowness, a stronger dollar and reduced commodity prices. On the positive side, hiring (up from 4 to 6) continued to grow modestly, providing some encouragement moving forward. (continue reading…)

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Blunt-Thune Carbon Tax Amendment Reminder of Potential Negative Impacts of a Carbon Tax

As part of the Senate’s consideration of the FY 2016 budget, Senators Roy Blunt (R-MO) and John Thune (R-SD) will offer an amendment opposing the future leveling of a carbon tax on U.S. manufacturers and businesses. The NAM has long warned of the potential negative impacts of an ill-conceived carbon tax program, particularly as other major emitting nations do not face similar cost burdens. Unilateral regulations or additional costs to address greenhouse gas (GHG) emissions will only hurt U.S. manufacturers while accomplishing little, if anything, in the way of global emission reductions.

In 2013, the NAM released an economic study conducted by nonpartisan NERA Economic Consulting, looking at two carbon tax scenarios: one levied at $20 per ton increasing at 4 percent, and the other designed to reduce carbon dioxide (CO2) emissions by 80 percent—an emission reduction level targeted in past legislative proposals. NERA found that any revenue raised by a carbon tax would be far outweighed by the negative impacts to the overall economy. (continue reading…)

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Consumer Prices Rose for the First Time in Four Months in February

The Bureau of Labor Statistics said that the consumer price index (CPI) rose for the first time in four months, up 0.2 percent in February. This was largely due to higher gasoline prices, which increased 2.4 percent in February. To be fair, the price of regular gasoline remains 33.5 percent lower today than it was 12 months ago. Indeed, the average price of regular gasoline declined from $3.639 a gallon on June 23 to $1.982 a gallon on January 26, according to the Energy Information Administration. It then rose to $2.256 per gallon on February 23, and has since edged up to $2.347 this week. (continue reading…)

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Markit: Chinese Manufacturing Activity Declined Again

The HSBC Flash China Manufacturing PMI reflected reduced activity again, down from 50.7 in February to 49.2 in March. It has contracted in three of the past four months now, reflecting a decelerated rate of growth in China. China has reduced its target real GDP growth rate for 2015 to 7 percent. New orders (down from 50.4 to 49.3), exports (up from 47.1 to 49.0) and employment (down from 49.3 to 47.0) were all below 50 in March – the threshold signifying growth. It was the reduction in demand that pushed the headline index lower. On the positive side, output (unchanged at 50.8) continues to expand very modestly for the month, and the decrease in input prices (up from 42.2 to 44.7) have helped manufacturers in terms of costs, even as the rate of decline was less in March. (continue reading…)

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Monday Economic Report – March 23, 2015

Here is the summary for this week’s Monday Economic Report: 

The U.S. economy has sputtered a bit in the early months of 2015. While it continues to grow modestly, several economic indicators are weaker than we would prefer. For example, manufacturing production decreased by 0.2 percent in February, declining for the third straight month. Many headwinds have combined to bring about this softness in the manufacturing sector, including global economic weakness, a strong U.S. dollar, the West Coast ports slowdown, a cautious consumer and the weather in some parts of the country. (continue reading…)

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