Agustino Fontevecchia of Forbes.com interviews Dave Huether, the National Association of Manufacturers’ chief economist, on the latest unemployment report and the impact of uncertainty on the economy. From “Uncertainty Weighs On Manufacturing Jobs“:

Within the private sector, which added 64,000 jobs as a whole in September, manufacturing recorded the second-largest job decline for September, trailing the construction sector drop of 21,000 jobs. But given the size of the sector, manufacturing’s decline was relatively small. “The sector is made up of 19 or 20 industries, so a decline of 6,000 jobs spread out that much isn’t a big preoccupation,” says Huether. More troubling is that temporary jobs, which usually precede full-time hiring, did not pick up.

For firms in manufacturing, the economic recovery has been sweet and sour. “Manufacturing led the recovery last year, but partially due to temporary factors,” says Huether, who cited tax credits for purchases of homes and efficient appliances, the Cash For Clunkers program, and the stimulus package. With those programs expiring or running their course, the resulting slowdown is unsurprising, according to Huether. “This weakness is a sort of a hangover, a sort of payback.”

Meanwhile, north of the border, The Sun reports, “Jobless rate shows signs of cooling economy“:

Canada’s labour market continued to show signs of stalling in September, with minimal gains reported in key industries and a slight dip in unemployment related to less youth actively looking for work.

The country’s unemployment rate dipped ever so slightly to 8 per in September, down 0.1 per cent, Statistics Canada reported on Friday.

• Los Angeles Times, “Unemployment stays at 9.6% as schools, governments slash jobs
• Reuters, “Unemployment rate unchanged at 9.6 pct“
• PBS NewsHour, September Job Losses Steeper, Worse for Economy Than Expected“

Below we have the announcement of a joint effort of the Michigan Manufacturers Association and the National Association of Manufacturers to put manufacturing and competitiveness issues on the front burner in the 2010 campaigns and beyond.

We hadn’t checked in with the state in a while, although Gov. Granholm crosses the radar every so often in Washington. Back what’s happening back in Michigan?

The Greater Lansing Business Monthly has an encouraging report, “Lansing Manufacturing on the Rebound”

There is good news to report on one of the key industries of the Lansing-area economy.  Manufacturing in the capital area is emerging from one of its worst downturns on record. Jobs this past June were up by 3,100 from a year ago and are averaging year-over-year gains of about 1,800 jobs for the first half of 2010. Employment topped 18,000 in June for the first time since 2008.

Our fortunes are tied to the auto industry of course, and the rebound is predominantly in this sector, especially at GM’s Lansing Delta Township plant. The higher volume Chevrolet Traverse is now made here and has replaced the Saturn Outlook. Some of the job additions include workers transferring from Spring Hill, Tenn.—and the plant is operating on three shifts while Lansing Grand River remains on one shift. Jobs at supplier plants have responded to this increased production by adding jobs.

Crain’s Detroit Business also reports an optimistic forecast, “University of Michigan economists predict reversal in job losses for five-county region.”

That’s good. Unfortunately, there’s a long way to go. Michigan’s unemployment rate in August was the second highest in the nation, at 13.1 percent better only than Nevada (14.4 percent).

Budget woes. There are budget woes. From AP, “Mich. governor signs budget bills into law“: “Lawmakers erased a projected $484 million deficit in the next budget. The deficit would have been far larger if it weren’t for extra federal help.” WJR’s Frank Beckmann is critical, “Budget again balanced with cowardly fixes.” The Jackson Citizen-Patriot editorializes, “Lansing falls short with budget again.”

Federal money, as per news release, “Stabenow, Levin Announce $450,000 for Oakland University’s Business Incubator in Sterling Heights.”

Manufacturing is certainly an issue in the gubernatorial campaigns. Democratic candidate Virg Bernero, the mayor of Lansing, is highlighting “advanced manufacturing” as he campaigns, “Bernero pushes manufacturing in Muskegon campaign stop.” The state NFIB and Michigan Manufacturers Assocation have endorsed the Republican candidate, businessman Rick Snyder.

Batteries…

(continue reading…)

If, as the trial balloons would have us believe, the White House will soon announce a new plan to promote jobs creation by lowering business taxes, President Obama has sure chosen a strange way to preview it — hailing his Administration’s success in winning a multibillion-dollar tax increase on business. From his weekly radio address:

We also ended a tax loophole that encouraged companies to create jobs overseas. Instead, I’m fighting to pass a law to provide tax breaks to the folks who create jobs right here in America.

The President is no doubt referring to H.R. 1586, the Education Jobs and Medicaid Assistance Act, which sends federal taxpayer dollars to the states to pay for public employee salaries and other state government spending. Included in the legislation, signed into law on Aug. 10, was $9.6 billion in new taxes on businesses with overseas operations. As the NAM’s Key Vote letter to the House explained:

An estimated 22 million people in the United States – more than 19 percent of the private sector workforce and 53 percent of all manufacturing employees – are employed by companies with operations overseas. Manufacturers feel strongly that imposing $9.6 billion in tax increases on these companies as proposed in the Senate Amendment to H.R. 1586 will jeopardize the jobs of American manufacturing employees and stifle our fragile economy.

Some of the proposed tax increases, which are mischaracterized as closing tax loopholes, actually represent significant changes to pro-growth tax policy supported by Congress and the Administration.

So this week, the President touts his “fight” for tax increases on employers. Next week, he may tout his fight for tax reductions on employers.

Talk about your uncertainty.

P.S. In his brief address today, there were four references to the Administration’s “fight” or “fighting,” the most powerful word in populism’s lexicon.

President Obama will make a statement at 10 a.m. at the White House on today’s new employment report, which showed August unemployment at 9.6 percent.

In the meantime, speculation soars about a September “stimulus” plan. The Washington Post reports, “White House considers pre-midterm package of business tax breaks to spur hiring“:

With just two months until the November elections, the White House is seriously weighing a package of business tax breaks – potentially worth hundreds of billions of dollars – to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses, according to people with knowledge of the deliberations.

Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States.

Running it up the flagpole, eh? Well, salud!

But it all seems so tactical, more a matter of packaging than policy. Take the research and development tax credit, for example. President Obama’s proposed budget for Fiscal Year 2011, released February 1, already called for making the R&D tax credit permanent. If you have to give it a new label, call it “Super Stimulus Innovation Jobs Great Tax Credit for Business, Business, Business,” to get it passed, fine, but the credit — first adopted in 1981 — has proved to be an effective tool for job creation and innovation that should have passed long ago on its merits.  (It’s like the Miscellaneous Tariff Bill: OK if you want to redub it the Manufacturing Enhancement Act, just get it done!)

Dena Battle, tax policy director at the National Association of Manufacturers, appeared on Fox Business News on Thursday to discuss these issues (video). Asked about the new proposals being floated, she said:

Some of the things they are talking about are good ideas. Obviously we support a permanent R&D tax credit. I think what’s really missing here are some other key elements. You’ve got these 2001 and 2003 tax cuts expiring at the end of this year, and Congress has done nothing to extend those. Businesses are looking at that, and they have no idea what tax rates they’re going to be paying next year.

You really have to do something to show businesses and give them that level of certainty right now. That has to be part of anything they’re doing for job creation.

Right. If you read toward the end of the Post story, you see a reference to the White House considering “targeted business tax breaks.” Targeted = tactical.

But as NAM President John Engler argued in his introduction to the NAM’s report, the “Manufacturing Strategy for Jobs and a Competitive America“: [We] have no battle plan, no comprehensive approach for making manufacturing in the United States more competitive, more productive and creating even more high-paying jobs. The unprecedented challenge to U.S. manufacturing pre-eminence requires clear thinking, a global vision and a plan.” That is, a strategy.

UPDATE (10:25 a.m.): President’s White House appearance amounted to a reaffirmation of his proposal for small business loans and extending “middle class tax cuts,” which is to say, letting the bulk of the 2001 and 2003 tax cuts expire. He’ll say more next week.

The Burea of Labor Statistics has just released the employment situation report for August, 2010, with the unemployment rate “about unchanged” at 9.6 percent, up from 9.5 percent. Kind of folksy, that “about unchanged.”

Top line:

• Nonfarm payroll employment changed little (-54,000) in August, and the unemployment rate was about unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today. Government employment fell, as 114,000 temporary workers hired for the decennial census completed their work. Private-sector payroll employment continued to trend up modestly (+67,000).

Manufacturing:

• Manufacturing employment declined by 27,000 over the month. A decline in motor vehicles and parts (-22,000) offset a gain of similar magnitude in July as the industry departed somewhat from its usual layoff and recall pattern for annual
  retooling.

Associated Press summarizes: “WASHINGTON — The unemployment rate rose in August for the first time in four months as weak hiring by private employers wasn’t enough to keep pace with a large increase in the number of people looking for work.”

WashingtonPost.com this morning posted a lengthy and interesting report on the Congressional politics of manufacturing, “New Democratic strategy for creating jobs focuses on a boost in manufacturing“:

President Obama and congressional Democrats — out of options for another quick shot of stimulus spending to revive the sluggish economy — are shifting toward a longer-term strategy that promises to tackle persistently high unemployment by engineering a renaissance in American manufacturing.

That approach, heralded by Obama last week in Detroit and sketched out in a memo to House Democrats as they headed home for the August break, is still evolving and so far focuses primarily on raising taxes on multinational corporations that Democrats accuse of shipping jobs overseas.

We lost track of how many attempts there were on Capitol Hill last week to try to use billions of dollars of new taxes on foreign earnings to pay for other federal spending.

As several of the National Association of Manufacturers “Key Vote” letters (here and here) noted:

An estimated 22 million people in the United States – more than 19 percent of the private sector workforce and 53 percent of all manufacturing employees – are employed by companies with operations overseas. Manufacturers feel strongly that imposing…tax increases on these companies …will jeopardize the jobs of American manufacturing employees and stifle our fragile economy.

Some of the proposed tax increases, which are mischaracterized as closing tax loopholes, actually represent significant changes to pro-growth tax policy supported by Congress and the Administration.

It’s just not a good approach, making the United States a less attractive place to do business.

Anyway, as Crocodile Dundee might say about raising taxes, “That’s not a strategy. Now, THAT’s a strategy.”

Today’s Labor Department employment report that job growth accelerated in April –- adding 290,000 jobs, the fastest monthly gain in four years -– is a welcome sign that the labor market is finally starting to build some positive momentum. The fact that 10 of the 12 major private sectors of the economy expanded employment in April, up from nine in March and six in February, indicates that employers are becoming confident enough in the emerging recovery to start hiring workers. Additionally, today’s report included positive revisions that increased employment gains by 121,000 in February and March.

Up for a fourth consecutive month, manufacturing employment increased by 44,000 to 11.6 million in April, bringing the 2010 gains to 101,000, the biggest four-month gain in a dozen years. The manufacturing employment gain was diffuse, with 19 of the 21 major industries adding jobs. However, half of the increase was in just three industries: food products, machinery and fabricated metals. The latter two were also responsible for the bulk of the 19,000 jobs added in March. Going forward, continued gains in manufacturing will not likely take hold until robust upswings in housing and business equipment join the strong export recovery that is already under way (and is likely one of the main drivers of the positive swing in manufacturing employment).

While the April rise in employment was impressive, the fact that the unemployment rate increased to 9.9 percent will likely weigh on consumer confidence in the near term. Unfortunately, this dichotomy of a simultaneous increase in both employment and the unemployment rate will likely continue in the months ahead. Those who were previously out of the workforce and re-entered as unemployed rose by 195,000 in April and accounted for a quarter of the unemployed last month. Over the past year, more than two million workers have left the workforce. As these workers resume searching for employment, they initially will be counted as unemployed and will elevate the unemployment rate until they find a job. Thus, a temporary rise in the unemployment rate back above 10 percent is a real possibility in the near term.

From a blog post from Gino DiCaro of the California Manuafcturers and Technology Association, “Create California jobs through efficient, effective regulations and renewed commitment to economic development“:

We must understand the impact new rules and regulations will have on job creation. Recent trends, resulting in unacceptable job and wage loss for California workers are alarming and unsustainable. Site Selection magazine has released new research showing, over the last three years, California averaged only 3.7 new or expanded industrial facilities per 1 million people, while the national average was 28.7. These results coupled with the fourth worst unemployment rate in the nation and an eroding manufacturing base requires a new perspective on California’s regulatory and economic development priorities.

It’s not about one regulation, it’s not about one industry or sector, it’s about overall process improvement and a renewed commitment to jobs in California.

The April 13 post released an open letter to the Legislature with more than 300 companies supporting a campaign to expand the Legislature’s oversight of California’s government agencies.

From the Bureau of Labor Statistics, unemployment rates in February for the bottom 10 metropolitan areas in the United States. Anything jump out?

363 Hanford-Corcoran, CA Metropolitan Statistical Area 18.2
364 Stockton, CA Metropolitan Statistical Area 18.4
365 Fresno, CA Metropolitan Statistical Area 18.5
366 Rockford, IL Metropolitan Statistical Area 18.6
367 Visalia-Porterville, CA Metropolitan Statistical Area 18.7
368 Modesto, CA Metropolitan Statistical Area 19.1
369 Yuma, AZ Metropolitan Statistical Area 19.9
370 Yuba City, CA Metropolitan Statistical Area 21.6
371 Merced, CA Metropolitan Statistical Area 22.1
372 El Centro, CA Metropolitan Statistical Area 27.2

A report Friday in the wake of the new employment figures, “What’s driving job creation?“:

There were job gains in almost every major U.S. industry: 27,000 in health care, 15,000 in retail and 17,000 in manufacturing, making things like machinery and steel beams. Those job gains were due to a jump in U.S. exports. Manufacturers not tied to exports didn’t hire many people.

Dave Huether is chief economist at the National Association of Manufacturers.

Dave Huether: I don’t think we’re going to see really significant increases in employment in manufacturing probably until 2011, 2012, when the domestic economy starts picking up steam and grows along with the global growth overseas.

From the Bureau of Labor Statistics, “Employment Situation Summary” for February 2010.

Nonfarm payroll employment was little changed (-36,000) in February, and the unemployment rate held at 9.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and information, while tem- porary help services added jobs. Severe winter weather

in parts of the country may have affected payroll employment and hours; however, it is not possible to quantify precisely the net impact of the winter storms on these measures.

And …

Employment in manufacturing was essentially unchanged in February. Small job gains in a number of component industries were offset by job losses in motor vehicles and parts and in chemicals.

Judging from all the news stories about weather-affected employment, thought the situation would have much worse. Good job of managing expectations, expectation managers!

Washington Post reports: “Job losses were surprisingly mild in February, the Labor Department said, as the employers cut 36,000 net jobs. Economists had expected worse losses due to the snowstorms last month. The unemployment rate was unchanged at 9.7 percent. The numbers suggest that while the job market is still weak, it is not worsening significantly.”

The photo above is K Street, Washington, looking west toward Farragut Square, 2:30 p.m., Wednesday, Feb. 10.