Economy Watch: Unemployment Stagnant; Manufacturing Exports to Rise; Senate Approves Spending Bill
By Dees Stribling, Contributing Editor
The U.S. Bureau of Labor Statistics reported on Friday that regional and state unemployment rates had little change in August. Twenty-six states recorded unemployment rate increases compared with the previous month, while 12 states and the District of Columbia posted rate decreases, and 12 states had no change. Compared with the same month last year, 42 states and D.C. saw unemployment rate decreases, seven states experienced increases and one had no change.
Nevada continued to suffer the highest unemployment rate among the states, 12.1 percent in August. Rhode Island and California were vexed by the next highest rates, 10.7 and 10.6 percent, respectively, and with Nevada they are still the only states with double-digit unemployment rates. As recently as early 2010, 18 states and the district had double-digit rates. North Dakota, still enjoying an energy boom, again registered the lowest jobless rate among the states, 3 percent.
The largest month-over-month increase in employment occurred in Texas (up 38,000 jobs), followed by Florida (up 23,200) and Missouri (up 17,900). Hawaii, Missouri and Oklahoma experienced the largest month-over-month percentage increases in employment (up 0.7 percent each). The largest decrease in employment for the month was in Virginia (down 12,400 jobs), while the largest monthly percentage decrease in employment was in the district, down 1.5 percent.
Manufacturing Exports to Rise, Says Consultancy
Manufactured exports—a bright spot of the U.S. economy in recent years—are set to surge, according to a new report by the Boston Consulting Group (BCG). Combined with jobs created as a result of re-shoring, higher U.S. exports could add 2.5 million to 5 million jobs by the end of the decade, as manufacturers shift production from European countries and Japan to take advantage of substantially lower costs in the United States, the report optimistically predicts.
BCG projects that by around 2015, the nation will have an export cost advantage of 5 percent to 25 percent over Germany, Italy, France, the U.K. and Japan in a range of industries, with the drivers of this advantage being the cost of labor, natural gas and electricity. As a result, the United Stats could capture 2 percent to 4 percent of exports from the four European countries, and 3 percent to 7 percent from Japan, by the end of the current decade. That might not sound like much, but by BCG’s reckoning, the capture would translate into as much as $90 billion in additional U.S. exports per year.
When the increase in U.S. exports to the rest of the world is included, annual gains could reach $130 billion. BCG forecasts that the biggest U.S. export gains will be in machinery, transportation equipment, electrical equipment and appliances and chemicals.
On Saturday, the U.S. Senate approved a $500 billion spending bill to finance the federal government for half a year from Oct. 1, adding its approval to the U.S. House’s earlier passage of the bill. Congress is now in recess until after the election, after which it will be a lame duck body but nevertheless tasked to deal with certain problematic fiscal details, such as the fiscal cliff.
Wall Street was up most of the day on Friday, but in the end barely moved downward. The Dow Jones Industrial Average was down 17.46 points, or 0.13 percent, while the S&P 500 lost an infinitesimal 0.01 percent. The Nasdaq gained 0.13 percent.