Plus: The August Employment Situation, NAM’s Labor Day Report, Eurozone’s Expanded Economy and Clear Winners from “Cash for Clunkers.”

Obama’s Chief Auto Adviser Named to Manufacturing Post
President Barack Obama has named an ex-investment banker who has helped drive the turnaround in the United States automotive sector as his top adviser on manufacturing. Yesterday, President Obama announced Ron Bloom, who has headed the White House’s auto task force since February 2009, will assume the title of senior counselor for manufacturing policy in addition to his role as senior adviser on the president’s task force on the automotive industry.

Bloom, who previously advised the United Steelworkers union and worked as an investment banker, will work with the National Economic Council to coordinate administration efforts to help the manufacturing sector, the White House said. Bloom’s reach will stretch across departments and agencies, including the Departments of Commerce, Treasury, Energy and Labor.

Congressional newspaper The Hill notes that Bloom “has a few wins under his belt, which should further serve to increase his influence.” He was “a fierce advocate of the ‘cash for clunkers’ program… . And he gets kudos for quickly steering General Motors and Chrysler through bankruptcy as the auto task force chief.” But Bloom also “faces a big challenge in revitalizing a sector devastated by the recession.”

“The manufacturing sector has been hit hard by the recession, with automakers and others slashing jobs. The administration has been looking for ways to help U.S. goods producers,” the Wall Street Journal reports (subscription required). “As part of a broader economic-stimulus program, it has introduced tax policies aimed at promoting jobs in the renewable-energy sector, among other measures.”

“A strong manufacturing sector is a cornerstone of American competitiveness and a critical part of President Obama’s economic strategy,” Bloom said. “As we meet the challenges of globalization and technological change, it is vital to have a concerted effort across the Administration to support an innovative, vibrant manufacturing sector.”

The announcement of Bloom’s newest role came days after Obama hailed the first growth in U.S. manufacturing in 18 months.

Clear Winners from “Cash for Clunkers”
The surprising success of the federal Car Allowance Rebate System (CARS), better known as the “cash for clunkers” program, is credited for a rise in August automobile sales, which were unevenly distributed among dealerships.

“Auto sales perked up in August because of cash for clunkers, but both General Motors and Chrysler struggled after emerging from bankruptcy protection,” the New York Times reports. Total U.S. industry sales “increased 1 percent during the month compared with August 2008, and rose 26 percent compared with July.” Much of the improvement “was attributed to the government’s popular cash-for-clunkers program.”

Some automakers were better able to take advantage of the CARS program, which concluded last month, than others.

“Despite having sold fewer [cash for clunkers] vehicles than Honda and Toyota, Ford was clearly the bigger winner last month with an increase of 16.99 percent for all of Ford Motor Company and a 21.25 percent jump for the Ford brand itself,” according to AutoBlog.com. “Toyota Motors sales and American Honda did post positive gains as well, up 6.41 and 9.93 percent respectively, while Nissan North America improved to a slight decline of 2.93 percent.”

“Then there’s Chrysler Group LLC and General Motors, down 15.43 and 20.19 percent respectively,” AutoBlog continues. “While the [CARS] program no doubt improved what might otherwise have been an even more dismal month for these two automakers, they were clearly unable to take full advantage of the program with the baggage of recent bankruptcy around their necks and lineups, at least in Chrysler’s case, that offered little incentive to upgrade one’s clunker.”

Analysts said GM and Chrysler’s performance was not surprising, “given that the companies were drastically reorganizing operations after receiving financial bailouts from the Obama administration,” the Times notes.

Subaru (up 51.51 percent), Kia (up 60.38 percent) and Hyundai (up 47.01 percent) each reported all-time sales records last month thanks to the boost from the government program.

“In total, manufacturers sold 1,261,977 million cars in August, exceeding the 1 million mark for the first time since August 2008,” according to an Auto Channel report. “The combination of pent-up demand and the availability of $3,500 and $4,500 government vouchers brought consumers back to dealerships in droves.

As a result, the industry’s seasonally adjusted sales rate (SAAR) jumped from 11.24 million in July to 14.09 million cars and trucks in August — the highest rate since May 2008.

“September will definitely be a ‘payback’ period for sales,” an industry analyst for Edmunds.com said at Edmunds’ AutoObserver.com. “I’m not expecting over a 9.5-million [seasonally adjusted rate] for September.”

The August Unemployment Situation
The U.S. unemployment rate jumped to a 26-year high of 9.7 percent in August, as non-farm payrolls fell for the 20th consecutive month, the Department of Labor estimated last week. However, the 216,000 fall marked the smallest decline in payrolls since August 2008.

Since the recession began in December 2007, U.S. payrolls have dropped by 6.9 million to 131.2 million total. The government data shows that unemployment has increased by 7.4 million during the recession to stand at 14.9 million.

Of the 271 industries tracked by the Labor Department, 35 percent were adding workers in August, according to a survey of hundreds of thousands of business establishments. (Source: MarketWatch)

“Companies are not laying people off at the same furious pace they were a few months ago — the number of people to lose their jobs in mass layoffs fell 26 percent in July. But neither are they willing to take the risk of bringing on new workers, despite signs that there could be better times ahead,” the Washington Post makes clear.

In the government’s latest weekly data, for the week ended Aug. 29, the number of people filing for initial state unemployment benefits fell by 4,000 to a seasonally adjusted 570,000 last week, the Labor Dept. reported Thursday. The four-week average of seasonally adjusted new claims rose 4,000 to 571,250, the highest in eight weeks.

“The number of private-sector jobs is now slightly below the level of August 1999 — meaning that a decade has passed without any net creation of non-government jobs, even in a span during which the population grew substantially,” according to the Post.

The good news is some economists say it seems we’ve hit bottom. While the jobless report in August indicates a rise in unemployment to 9.7 percent, following on the heels of a slight decline in July, it was still a positive sign in that payroll losses have moderated, according to MarketWatch.

NAM Highlights Job Prospects in U.S. Manufacturing
The manufacturing sector lost nearly 2 million jobs over a 19-month period ending in July and isn’t expected to add employment until 2011, according to the National Association of Manufacturers’ (NAM) Labor Day 2009: The Manufacturing Report.

The annual Labor Day report says that the industry lost 1.96 million jobs between December 2007 and July 2009 primarily due to downturns in consumer durable goods purchases and housing, and forecasts 65,000 additional job losses in 2010, down from the projected 1.6 million expected by the end of 2009.

However, while NAM warns the economy is still fragile, it also confirms signs of improving conditions in the manufacturing sector over the past few months. The new report projects that by 2014, the manufacturing sector will regain more than 40 percent of the jobs lost during the current downturn. NAM also forecasts 89,000 manufacturing jobs created in 2013, remaining unchanged in 2014.

More on this report later in the week.

Eurozone Economy Increases First Time in 15 Months
“The Eurozone economy expanded in August for the first time after 15 months of business contraction,” Agence France-Presse reports on the final purchasing managers’ index (PMI) from research group Markit.

Released last week, the final PMI for the 16 countries using the euro rose from 47 in July to 50.4 in August, crossing the 50-point line that indicates economic expansion.

“The return to growth of the private sector economy was led by the first gain in manufacturing production since May 2008,” according to the final data. “The service sector neared stabilisation in August, following a record easing in the rate of contraction of business activity.”

The principal driver was a resurgence of output in German manufacturing and services, plus manufacturing output in France, “adding to signs Europe’s worst recession in more than six decades is easing,” Bloomberg News reports.

“France and Germany saw gross domestic product already expanding in the three months to June,” Financial Times notes, but “the continued weakness of Italy, Spain and Ireland are major concerns and make the rebound heavily reliant on the big-two,” according to Markit economist Rob Dobson.