U.S. Economic Data is a Mixed Bag

Strengthening demand for automobiles and an increase in U.S. fuelexports has helped spark a sluggish economy, but is the American workforce reaping the benefits? Auto plants are working around the clock to build cars and maximize capacity utilization. July automobile sales ran at a 15.8 million annual pace, up from 14.2 million just a year ago. Despite the rosy picture for sales, the automobile workforce stands at 647,000 workers, compared to 925,000 when auto sales peaked at 17.5 million in 2005. Some manufacturers, such as Chrysler, have found it difficult to find the right people for the job.  “People who know how to build cars have disappeared,” stated Chrysler Vice President Mauro Pino. The Chrysler executive said that over 70% of applicants were rejected, mainly because they couldn’t pass the initial assessment tests. Likewise, the U.S. energy boom has helped balance trade and support President Obama’s goal of doubling exports by 2015. The value of petroleum and coal exports has more than doubled over the last year to $110.2 billion as of June. The expanding U.S. energy sector is adding jobs, but not nearly enough to push the unemployment rate below 7%.  Other indicators have come in on the weaker side such as industrial production, which was reported flat last week, and empire manufacturing, a measure of manufacturing strength in the New York region, which fell to 8.24 versus an expected rise to 10.0. Mortgage applications also declined month over month, consumer confidence fell and housing starts rose less than expected in July.  The question has now become whether the sectors showing substantial strength can create enough jobs and higher wages to offset those showing more sluggish activity.