This morning the Labor Department announced that the U.S. economy added 142,000 jobs in August, far fewer than the over 200,000 jobs economists predicted. Though job growth slowed, the unemployment rate ticked down slightly to 6.1%.

This is the smallest monthly jobs gain of 2014 and sharply lower than the average over the last 12 months of 212,000 new jobs per month.

To learn more about what the August jobs report means, please join Business Forward for a webinar featuring the new chief economist at the U.S. Department of Labor, Heidi Shierholz.


Can you join Monday's webinar on the jobs report?

  

What: Monthly Jobs Briefing Webinar
WhenMonday, September 8 at 4 p.m. ET
Where: Your computer

Here's the link to register: https://attendee.gotowebinar.com/register/952566657694956545


Posted In: Jobs

Two new reports from the Commerce Department show just how important exports are to job creation and economic growth. Yesterday, Secretary of Commerce Penny Pritzker, U.S. Trade Representative Michael Froman, and Columbus Mayor Michael Coleman held a press conference in conjunction with the release of new geographic data on export-related jobs.

Exports contributed to almost a third of economic growth since the recession.

Some parts of the country have particularly benefited from exports. Secretary Pritzker said that exports “account for nearly all of the post-recession growth in cities like Youngstown, Detroit, and Kansas City.”

One report shows a state-by-state breakdown of the 7.1 million jobs supported by exported goods (data for services by state not available). Texas leads the way with more than 1.3 million jobs that depend on exported goods. 

The Commerce Department has also made data for 387 metro areas available. Houston, New York, Los Angeles, Seattle, and Detroit respectively lead the nation’s metro areas in export-supported jobs. But the effect of exports is not limited to major port cities. Mayor Coleman said that rising exports were one of the reasons why Ohio has been able to add 200,000 jobs since the recession.

All three officials noted the importance of reauthorizing the Export-Import Bank to continue the growth of U.S. exports. The Ex-Im Bank, which helps secure financing for export deals involving U.S. businesses, will be shut down on October 1 if Congress does not issue a reauthorization. Last year, The Ex-Im Bank supported over 200,000 jobs at no cost to the taxpayer.

Posted In: Economic Trends

 Marillyn Hewson, President and CEO, Lockheed Martin

Today is Women’s Equality Day, marking the 94th anniversary of certification of the 19th Amendment on August 26, 1920, which gave women the right to vote.

Now women serve as leaders in government and business. Twenty-four of America’s largest publically-traded companies are led by women, and that number continues to grow.

Catalyst, a non-profit working to expand opportunities for women in business, has a complete list of women-led companies on the Fortune 500 and Fortune 1000. Below are the women CEOs of Fortune 500 companies (rank in parenthesis):

  • Mary Barra, GM (7)
  • Meg Whitman, HP (17)
  • Virginia Rometty, IBM (23)
  • Patricia Woertz, Archer Daniels Midland Company (ADM) (27)
  • Indra Nooyi, PepsiCo, Inc. (43)
  • Marillyn Hewson, Lockheed Martin (59)
  • Ellen Kullman, DuPont (86)
  • Irene Rosenfeld, Mondelez International (89)
  • Phebe Novakovic, General Dynamics (99)
  • Carol Meyrowitz, The TJX Companies, Inc. (108)
  • Lynn Good, Duke Energy (123)
  • Ursula Burns, Xerox Corporation (137)
  • Deanna Mulligan, Guardian (245)
  • Kimberly Bowers, CST Brands (266)
  • Debra Reed, Sempra Energy (267)
  • Barbara Rentler, Ross Stores (277)
  • Sheri McCoy, Avon Products Inc. (282)
  • Denise Morrison, Campbell Soup (315)
  • Susan Cameron, Reynolds American Inc. (329)
  • Heather Bresch, Mylan (377)
  • Ilene Gordon, Ingredion Incorporated (412)
  • Jacqueline Hinman, CH2M Hill (437)
  • Kathleen Mazzarella, Graybar Electric (449)
  • Gracia Martore, Gannett (481)
| Julie Faust, Digital Associate

Job Openings Hit 13-Year-High

U.S. employers advertised a 13-year-high of 4.67 million jobs in June, the highest number the country has seen since February 2001, according to a Department of Labor report released last week.

June’s job openings marked a 3.3 percent increase in the rate of job openings, the highest since June 2007. Areas that saw increases in openings include factories, retailers, and professional and business services.

The report follows other positive signs of economic growth. Earlier this month, the Department of Labor reported a July jobs gain of 209,000, marking six consecutive months of jobs gains over 200,000, which last occurred in 1997.

Jeremy Schwartz, an analyst at Credit Suisse bank said that the report “provides further confirmation that the U.S. labor market has indeed shifted to a period of stronger growth.”

Posted In: Jobs

The data that the U.S. Department of Commerce collects guides trillions of dollars of investments every year. Did you know the federal government provides this information to any business or researcher who wants it?

To find out what free data is available to business, please join us for a conference call on big data and business with Mark Doms, Under Secretary for Economic Affairs, U.S. Department of Commerce, on Wednesday, September 10. He’ll discuss the Department of Commerce’s big data initiative and how data is revolutionizing our economy.  

What: Conference call for business leaders on big data and business
Featuring: Mark Doms, Under Secretary for Economic Affairs, Department of Commerce
When: Wednesday, September 10, at 11:00 AM ET
Where: You will receive a unique dial-in and password when you register.  

 

*required

There will be time for you to ask questions, and you can submit them in advance by emailing info@businessFWD.org.

Posted In: Business Forward Events
| Erik Roos, Policy Analyst

What You Need to Know About the Ex-Im Bank

When Congress returns from their August recess, they will have two weeks to decide the fate of the Export-Import Bank. The bank’s authorization expires on October 1, and without action from Congress before then, it will shut down, putting American exporters at a competitive disadvantage.

What is the Ex-Im Bank?

The Export-Import (Ex-Im) Bank is a Congressionally-chartered federal agency that provides trade financing to facilitate the purchase of American-made good by foreign customers. In 2013, the bank financed $37.4 billion worth of exported goods and supported over 200,000 jobs.

The Bank was created in 1945 and operates under a renewable charter. Congress last reauthorized its charter in 2012 for two years, and the Bank’s authority will expire on September 30 if lawmakers do not act.

How does the Ex-Im Bank help American businesses?

About 80 to 90 percent of goods traded between countries rely on financing, from both government and the private sector. The bank provides backing in cases where an important opportunity exists for American businesses but private investors will not enter the market without a guarantee. Often, the Ex-Im Bank will use private sector partners to provide financing, with the bank providing guarantees. About 98 percent of the Ex-Im Bank’s transactions in 2013 involved commercial banks.

Loan Guarantees: Loan guarantees are one way the Ex-Im Bank helps exporters. If a foreign buyer cannot obtain a loan from a commercial bank, the Ex-Im Bank may  guarantee the repayment of that loan.

Working Capital Guarantees: Many small businesses use the bank for working capital guarantees. A small business with export potential may require a short-term working capital loan from a bank, which the Ex-Im Bank guarantees to reduce the risk.

How much does the Ex-Im Bank cost taxpayers?

Nothing. In fact, the Ex-Im Bank generated profits of $2 billion over the past four years, which it sent to the general fund.

The Ex-Im Bank is designed to be self-sufficient by charging fees to cover the risk of default and its operating costs. The bank is required to aggressively manage its risk and keep default rates under 2 percent. Currently, the default rate for Ex-Im Bank transactions is about 0.2 percent. For comparison, the default rate for corporate bonds in 2013 was about 1 percent. If the rate of default rises, the Bank has built up nearly $4 billion in reserves as insurance. 

Do other countries provide similar financing to exporters?

 Over 60 countries have export-credit agencies (ECAs), similar to the Ex-Im Bank, to promote exports of nationally-made goods. One study from the National Association of Manufacturers and the Economist Intelligence Unit shows that compared to other countries, the support provided by the Ex-Im Bank is relatively small. The U.S. ranks sixth, behind China, Japan, Canada, South Korea, and Germany, in the total support provided by ECAs. 

What kind of companies does the Ex-Im Bank support?

The Ex-Im Bank provided support to 3,400 businesses last year. About 90 percent of those were small businesses, which accounted for 80 percent of the banks transactions. However, small businesses have smaller and shorter-term capital needs, so just less than 20 percent of the bank’s financing directly went to small businesses.

Many large companies that use the Ex-Im Bank rely on small businesses in their supply chains, so the Bank’s support benefits many more small companies indirectly. The Ex-Im supports a variety of industries, but about half of the financing authority is directed to aircraft exports.

 

 

| By Erik Roos, Policy Analyst

What does the Ex-Im Bank have to do with Africa? Everything.

This week’s U.S. Africa Leader’s Summit highlighted the importance of increasing the presence of U.S. businesses abroad and the need to reauthorize the Export-Import Bank this fall.

One of the challenges U.S. businesses face in Africa is obtaining financing partners—commercial banks may be unwilling to take on that level of risk. The Ex-Im Bank provides insurance and loan guarantees, which reduce the risk for commercial banks and allow these transactions to take place.

Here’s why that’s important:

By 2050, Africa will supply 1 out of 4 of the world’s workers. This will make it a large market for U.S. goods, presenting a huge opportunity for U.S. businesses that make investments now. Even today, seven of the top 10 fastest growing economies are in Africa.

The U.S. exported over $50 billion in goods and services to Africa in 2013, supporting approximately 250,000 jobs. However, Africa-bound exports only represent about 1 percent of total U.S. exports, despite rapid growth in recent years.

Only about 5 percent of the Ex-Im Bank’s support goes to Sub-Saharan countries, as there are limited opportunities for businesses to export to the region. However, the bank plays a greater role in supporting the businesses that are able to export to Africa than in any other region. Nowhere else does the bank support a greater share of U.S. exports than in Africa.

General Electric CEO Jeff Immelt was vocal about the role the Ex-Im Bank plays in Africa:

“We don’t want to get in the middle of Washington’s political wars, but how important do you think it is for the future prospects of getting more financing in Africa for American businesses to renew the Export-Import Bank?”

Posted In: Economic Trends
| Erik Roos, Policy Analyst

Congress Adverts Highway Shutdown, Long-Term Plan Still Needed

Last week, Congress agreed to temporarily fund highway and transit projects through May 2015. The Highway Trust Fund was projected to reach insolvency. Without action, a lapse in highway funding would have occurred, putting many transportation projects on standby, increasing congestion, disrupting supply chains, and threatening the jobs of up to 700,000 workers.

Preventing a Highway Crisis

The highway bill passed the Senate with bipartisan support, in an 81 to 13 vote. The bill passed the House two weeks ago by a 367 to 55 margin, and President Obama has indicated he will sign it.

Senator Angus King (I-ME) called the legislation a mix of good news and bad news. “The good news is, we did something. The bad news is, it was the 11th punt in the last six years and showed an inability to face a real problem and deal with it.”

The Need for a Long-Term Solution

Averting a near-time crisis was the greatest priority. But the temporary bill creates uncertainty about what Congress will do next May, right at the beginning of construction season. The Highway Trust Fund was created to provide an independent revenue source for highway funding, which in turn, can help facilitate long-term planning.  As a result, Congress has traditionally passed highway spending bills that authorize projects for four to six years. The longer -timeline allows planners to make strategic decisions about resources and undertake larger infrastructure projects.

But without a lasting solution for financing the Highway Trust Fund, lawmakers are likely to continue passing short-term highway bills that limit decision-making. Since 2009, Congress has approved  10 short-term authorizations. On such a short timeline, officials will face difficulty planning and financing  the dynamic infrastructure investments that foster economic development.

Now is the Right Time to Reinvest in Roads

In the meantime, highways have become increasingly congested, which businesses often experience through supply chains operations. An estimated 65 percent of our nation’s roads are rated in poor condition. Highway bottlenecks cause more than 243 million hours of delays for the trucking industry every year, costing $7.8 billion and raising delivery prices. 

At the same time, improving the country’s infrastructure has never been cheaper. Highway construction costs have declined by 20 percent since the recession. Interest rates are at historic lows. But as the economy recovers, prices will rise.

| Erik Roos, Policy Analyst

Economy Gains 200,000 Jobs for the Sixth Consecutive Month

The Bureau of Labor Statistics announced Friday that the economy added 209,000 jobs in July. The unemployment rate was 6.2 percent, around where it has been for the past three months.

Business Forward hosted a webinar on Monday with Dr. Jennifer Hunt, the Deputy Assistant Secretary for Microeconomic Analysis at the U.S. Department of the Treasury, on the implications of the July report.

Among the highlights:

  • July was the sixth straight month of jobs gains above 200,000 which has not happened since 1997. The report also was the 53rd straight month of private-sector job growth.
  • May and June employment gains were revised by a combined 15,000.
  • Manufacturing added 28,000 jobs, well above the average gain of 12,000 jobs over the past year.

In addition to this month’s job numbers, Dr. Hunt also explained the findings of a new Council of Economic Advisors study on labor force participation. The labor force participation rate, the percentage of people ages 15 and over that are working or are seeking a job, had risen from 1960 through 2000, largely due to women entering the labor force. But it has sharply declined since 2008. The report shows a combination of an aging population and effects of the Great Recession caused a majority of the decline in the labor force participation rate.  

One listener asked how the labor force participation rate of Americans compared with other countries. Dr. Hunt explained that developed nations have different retirement policies that can influence that statistic. Considering only those in the working ages (15 to 65), the U.S. ranked second in labor force participation after Sweden, as recently as 2000. But since then, several countries have overtaken the U.S. Dr. Hunt noted that immigrants tend to be younger and have higher participation rates, so immigration reform could increase the LFPR. Likewise, implementing workplace policies that made it easier for women to work could also boost the LFPR.

Dr. Hunt's slides are available below:



July Jobs Report with Department of the Treasury and Business Forward from businessforward
| Elizabeth Kerr, Director of Communications

President Signs Executive Order to Cut Red Tape, Help Contractors that Obey the Law

Today, President Obama issued an executive order that will give businesses that play by the rules and maintain safe work environments a leg up on their competition. The order also creates a one-stop website to make it easier for businesses to meet their reporting requirements. It will protect workers and save taxpayer money.

The President’s executive order requires companies with federal contracts of more than $500,000 to disclose any labor violations in the last three during the application process. The majority of businesses, which do not have a history of labor violations, will only have to check a box.

This order is part of a broader administration effort to improve the efficiency and accountability of government contracting. A recent analysis shows that companies with labor violations are also inefficient. This new reporting requirement take will help ensure that taxpayers are not paying for poor performance.

Earlier this month, the White House also reapproved the QuickPay program, cutting in half the time it takes to pay small business contractors. The program, which began in 2012 and requires the federal government to pay contractors within 15 days, has facilitated more than $220 billion in payments to contractors.

 

Read the full order >

Posted In: Jobs