Despite a persistently high unemployment rate of 9.5pc, initial US weekly claims for jobless benefits fell to 429,000 in the week ending July 10, down 29,000 from the week before – the lowest level since August 2008.MORE EVIDENCE HERE:
It was the second straight week that initial claims dropped, in a sign that the American jobs market may be starting to recover.
The US Labor Department said manufacturers, including car makers, had not pressed ahead with seasonal shutdowns, keeping more people in work. General Motors is keeping the majority of its plants open to meet a pick up in demand for some models.
A Labor Department official said: "This is not just a General Motors thing, we are seeing this across a swathe of states, we did not see."
The manufacturing recovery continues to trend upward and has rebounded from severely depressed levels in 2009, according to the quarterly Manufacturers Alliance/MAPI Survey on the Business Outlook—June 2010. The index rose to a record high 81% from 78% reported in the March 2010 report.
It breaks the previous high of 80% set in June 2004 and marks the third straight quarter it has reached 50% or above. The new benchmark for the index represents a significant turnaround from March 2009 when the index registered an historic low 21%.
"The overall composite index and several forward-looking individual indexes (orders, export orders, and U.S. prospective shipments) achieved new heights and indicate continued recovery in manufacturing," said Donald A. Norman, Ph.D., MAPI Economist."We should remain cautious, however, because many of the individual indexes are based on year-over-year comparisons. Manufacturing sector production fell sharply during the second quarter of 2009; a broad-based increase in production from the production trough reached at the end of the second quarter of 2009 would naturally lead to an increase in these indexes. Still, the broad-based strength in the composite index and the individual indexes point to further expansion in the next three to six months."
The backlog orders index, which compares the second quarter 2010 backlog of orders with the backlog of orders one year earlier, rose to 87% in June from 63% in the March survey.
"Low-cost sourcing can result in lower responsiveness and poor customer service, higher costs, and additional risk factors such as supply chain disruptions, diminished intellectual property protection and environmental concerns," said the IDC Manufacturing Insights report for Infor, the business software provider, and IBM.
"Manufacturers will continue to focus on optimising manufacturing operations and the supply chain, but they are now consistently prioritising customer fulfilment above all else. This is a remarkable shift from pure cost cutting initiatives of the past as seen in 2009 with the crisis." North American and European manufacturers were making this change, the report added.
Fraser Geekie, an in-sourcing expert from Oxford-based The Consultancy Company, said that the repatriation of production was now high on boardroom's agendas.
"I am now seeing a significant trend of people maybe not doing it but businesses questioning whether the offshoring and outsourcing they did eight to nine years ago is the right thing now. It's driven by currency and increased supply chain costs."
- A MAJOR FACTOR IS THE MATURATION OF CHINA'S INDUSTRIAL ECONOMY AND THE EMERGENCE OF A CHINESE MIDDLE CLASS.
- AND THE YUAN IS FLOATING NOW, MORE OR LESS - AND WILL APPRECIATE.
- THESE FACTORS ARE RAISING LABOR COSTS THERE, AND INCREASINGLY DIVERTING PRODUCTION CAPACITY TO DOMESTIC CONSUMPTION.
- THIS HAS ALSO MADE THE CHINESE PICKIER ABOUT WHO THEY WILL DO EXPORT BUSINESS WITH.
- OVER THE NEXT 2 YEARS, THIS WILL DRIVE MANUFACTURING BACK TO THE USA.
- THIS WILL NOT COME IN TIME TO SAVE OBAMA'S ASS - THANK GOD!
- BUT THE WORM HAS TURNED: THE CHINA-ADVANTAGE IS WANING, AND DOMESTIC PRODUCTION WILL ONCE AGAIN BECOME AN ADVANTAGE.