Last Week's Economic News Disappointing

Washington, DC, July 6, 2010--Last week's economic news again was more bad than good, according to Dave Huether, chief economist for the National Association of Manufacturers.

Of the nine major economic indicators that came out last week, six declined, one moderated and just two improved.

He noted that several June reports, including a report on Texas manufacturing activity by the Dallas Federal Reserve and a national report by the Institute for Supply Management, showed that manufacturing activity slowed last month.

"This supports last Friday's employment report, which showed that manufacturers continued to add jobs last month, but the pace of employment growth was the mildest so far this year," he noted in his weekly report.

The Labor Department reported that overall employment fell by 125,000 in June. Similar to May, June was driven by wild swings in temporary employment to conduct the decennial census. After rising by over 400,000 in May, temporary Census jobs fell by 225,000 last month.

Stripping away government employment, June private-sector employment showed the labor market downshifting into low gear.

For the manufacturing sector, last week's June report was both good and bad, Huether said. On the positive side, manufacturers increased employment for a sixth consecutive month.

Through the first half of the year, manufacturers added 136,000 jobs, accounting for nearly a quarter of private-sector job growth so far this year. This also was the largest number of jobs added over a six-month period by manufacturers in a dozen years.

The bad news is that the 9,000 gain in June was the smallest increase so far this year and not very widespread.
Last week's reports of moderating manufacturing activity were consistent with a number of regional manufacturing

Overall, the deceleration in private sector-job growth over the past several months is a concerning signal that the economic recovery is hitting a rough patch at mid-year, Huether said.