U.S. Unemployment, Industrial Spending Remain Same in August

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Researched by Industrial Info Resources (Sugar Land, Texas)--One of the hottest topics in recent months has been the depressing jobs situation in the U.S. Everyone is outraged at the lack of jobs across the country and the stagnant 9.1% unemployment rate, but there are no good solutions being posed that could help to alter the situation. To make matters worse, Wall Street has been extremely erratic in recent months, and this has not instilled confidence in companies who had been considering expansion and jobs creation. The unemployment news from August did nothing improve the situation, as the rate was unchanged and essentially zero net jobs were created. The month saw industrial spending remain flat as well.

The unemployment situation has been a major problem for most of 2011. While at times jobs have been created and the overall unemployment rate has decreased, it has not been by a significant amount. In addition, industrial spending has been anything but stable from month to month, which has not given much hope for improvement in the overall jobs situation in the months to come.

August was a month of modest gains and losses in various sectors that, when totaled at month's end, saw zero new jobs created nationwide. The mining and logging sector gained 5,000 jobs, but the construction sector, which is reeling from 13.5% unemployment, lost 5,000 jobs. The manufacturing sector lost 3,000 jobs during the month thanks to erratic behavior within its ranks. Fabricated metal products manufacturers lost 5,400 jobs, while machinery manufacturers gained 3,900. Semiconductors and electronic products manufacturers saw 2,400 jobs created in August, but the motor vehicle and parts manufacturers lost 2,800 jobs. Throughout the manufacturing sector, each set of job gains was countered by job losses in another sector.

On the spending side of the equation, industrial spending was flat again in August, as $10.7 billion worth of industrial projects began construction activities during the month, a significant decline from the traditional high spending months of summer. Spending has been relatively flat throughout the summer, thanks to various unstable economic indicators that have caused companies to take a much more cautious approach to investment. Of the industries that were spending in August, the Power Industry saw the highest amount of capital and maintenance spending, with $3.4 billion worth of projects beginning construction activities.

The Industrial Manufacturing Industry and the Metals & Minerals Industry made significant contributions to the spending totals for the month at $2 billion and $1.6 billion, respectively.

No single region of the U.S. saw a significant spending boost in August. Given how flat total spending was, it is not surprising that it was spread across the country relatively evenly. The Southwest region, which incorporates the states of Texas, Louisiana, Oklahoma and Arkansas, saw $2.3 billion worth of capital and maintenance projects begin construction activities and was the region with the largest concentration of project activity for the month. The Midwest saw $1.6 billion in project starts, while the Great Lakes added $1.5 billion to the total and the West Coast contributed $1.5 billion, with the balance being spread throughout the rest of the regions.

August was not an impressive month in terms of spending or employment. While this is not necessarily alarming when taken by itself, the summer has been very slow when it comes to both spending and employment opportunities, and that does not bode well for the traditionally slower winter months. In addition, with spending slowing down now, that could indicate a significant lack of new plants becoming operational in the spring, which will mean less new jobs as a result. While several plans have been floated with the intent of promoting jobs growth, nothing has taken hold just yet. With presidential candidates spewing their rhetoric more often as 2012 approaches, it is unlikely that any significant jobs growth program will begin at this time. The fall and winter and possibly the next 12 months could be very long for the U.S. if spending continues to slow and more is not done to create jobs.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.