Plus: Improvements in Inventories, Businesses Split on Health Care, China’s Renewed Growth, U.S. Standing Tougher on Trade Agreements and MORE.

Many, if not most, Americans don’t consider a recession over until jobs come back, and economists are saying this won’t likely occur until next summer. “It is going to take a while for manufacturing and construction to stop losing jobs, and it will take time for businesses to be confident enough to go out and hire,” Mark Zandi, chief economist at Moody’s Economy.com, told the New York Times.

The current unemployment rate is 9.5 percent, and given the massive job losses associated with the current recession, the recovery is “likely to come not with job growth, but a diminution in job loss,” the New York Times adds. As of the Department of Labor’s latest weekly unemployment report, initial jobless claims have fallen steeply for two consecutive weeks, “but the drop in the filings still doesn’t necessarily mean job prospects are improving,” the Wall Street Journal notes.

First-time jobless claims fell to 522,000 the week ended July 11; that is 47,000 fewer than the previous week’s revised figure of 569,000. The Labor Department did add that the weekly data had been skewered because of layoffs in the automotive sector, occurring earlier than normal plant shutdowns factored into the department’s seasonally adjusted data. “This big drop is not an indication of what’s going on economically; it’s more an issue with the seasonal factor,” a department statistician told Agence France-Presse.

Manufacturing Shows Improvement
For the first time since June 2007, the Manufacturers Alliance/MAPI composite index has shown improvement, going from the historic low of 21 in March to 24 percent in June. While still far below 50, the point that differentiates between growth and contraction, a reading of 24 indicate that the sector is no longer in free fall.

Nonetheless, recovery is still slow. According to MAPI, the indexes point to lower activity over the next three to six months.

The inventory index was among the indexes that improved, dropping to 15 percent in June from 37 percent in March. This drop shows that manufacturers are making progress in paring down their extra inventories.

Meanwhile, the Federal Reserve also reported a slowdown in production-output decreases. According to last week’s Fed report, manufacturing output moved down by only 0.6 percent in June, compared with the 1.2 percent drop in May.

Businesses Concerned, Divided on Health Care Reform
Executives nationwide are concerned about the potential burdens the new health care bills currently being hammered out in Congress could put on their businesses, the Wall Street Journal says. Many are particularly concerned about the surtax that would be placed on those earning more than $350,000 and penalize companies that don’t offer health insurance to their employees with an 8 percent payroll tax.

The National Association of Manufacturers (NAM) expressly singled out the surtax as a problem, saying that 70 percent of manufacturers file at individual rates and “would be hit hard by this surtax.”

“Many of these businesses fall into the higher tax bracket, even though most of their taxed income [...] is being reinvested into the business,” IndustryWeek reports. “Adding a surtax onto individual rates that are already expected to rise will result in federal tax rates approaching nearly 50 percent for these businesses (with state taxes adding even more burden).”

The bill unveiled last week would create three new tax brackets for high earners. The bill, according to the Associated Press, “would add a 5.4 percent income tax ‘surcharge’ on families making more than $1 million a year, starting in 2011. Families making more than $350,000 would get a 1 percent tax and those making more than $500,000 would get a 1.5 percent tax.”

Other businesses are torn as to how health care reform should be handled, although cost control is a universal wish.

New Trade Enforcement Measures Announced
In an attempt to ensure U.S. workers and companies benefit from foreign trade, Washington is taking a tougher stand on violations of trade agreements, including substandard labor practices. According to U.S. Trade Representative Ron Kirk, the “several concrete new measures” would apply to countries with trade pacts with the U.S. and also those with free-trade agreements.

“Every one of those agreements contains an obligation to enforce domestic labor laws, and to strive for labor standards that adhere to international norms,” Kirk said. “Now, we will insist that our trading partners hold up their end of the bargain. American workers should not be expected to compete against substandard labor practices.”

China Regains Growth Pace
Due largely to Beijing’s stimulus measures, China is back on pace to meet its government’s target of 8 percent growth this year.

The Chinese economy expanded at an annual rate of 7.9 percent in the three months to the end of June, driven by domestic consumption and an uptick in industrial activity.

“This is a stunning recovery,” Andy Rothman, an economist based in Shanghai at the brokerage firm CLSA, told the New York Times. “And it’s also not just the government money fueling the recovery. The private sector is also recovering, and that’s the key.”

Second-quarter growth is likely to be close to 8 percent, the People’s Daily said, citing an analysis by the National Statistics Bureau (via Agence France-Presse). To ensure continued growth, the central bank cautions that the difficult time is not over, further noting that the government “should guide credit to grow rationally and optimize loan structure,” to offer more support to small and medium-sized businesses and the agricultural sector.

Eurozone Trade Surplus Contracts
The Eurozone posted another trade surplus in May, but the downturn has weakened exports and dragged imports down. The non-seasonally adjusted surplus shrank to €1.9 billion ($2.7 billion) in May from €2.7 billion ($3.8 billion) in April, the Wall Street Journal reports the Eurostat as having released Friday. The data indicates that trade remains substantially weakened after the Eurozone plunged into the deepest recession since World War II. The Eurozone posted a trade deficit of €3.8 billion ($5.4 billion) in May 2008.

“This is clearly disappointing; although industrial production recovered in May, this has yet to be seen in the trade data,” Dominique Barbet, an economist at BNP Paribas, said in a note (via the Journal).

The record 2.5 percent drop in Eurozone gross domestic product during the first quarter was taken to be the low point of the recession, and Friday’s numbers point to a gradual recovery, economists said.