Plus: Obama’s Strategy for American Innovation, Ford’s Future Profitability, Mass Layoffs in Manufacturing, Logistics Challenges and the EPA’s Emissions Reporting Rules.

Fed Expresses Cautious Optimism
Citing positive indications from “policy actions to stabilize financial markets and institutions,” the Federal Reserve held interest rates steady at historic lows. On Wednesday, the Fed announced it will maintain the target range for federal funds at 0 percent to 0.25 percent as economic conditions are likely to require a relatively low rate for the foreseeable future.

The Fed cautiously welcomed the improving economy and slightly slowed down its debt-buying plans as it buys time to monitor how the nation recovers from the recession. The Fed will move forward with purchasing $1.25 trillion in mortgage-backed securities and up to $200 billion in agency debt, but plans to “gradually slow the pace of these purchases in order to promote a smooth transition in markets,” which it expects to occur by the end of the first quarter of 2010.

“The Fed’s statement on Wednesday suggested that policymakers had become slightly more optimistic since their meeting in August. At the same time, policymakers left themselves ample room to keep rates low, contending that high unemployment and unused factory capacity would keep inflation subdued for the foreseeable future,” the New York Times reports.

Obama Unveils American Innovation Plan
Last week, President Barack Obama laid out his vision for innovation, entrepreneurial growth and employment at a community college in Upstate New York. President Obama’s program is directed at strengthening the nation’s “economic ecology,” including initiatives for an educated workforce and a fluid environment that stimulates entrepreneurship.

“My administration is releasing our strategy to foster new jobs, new businesses and new industries by laying the groundwork and the ground rules to best tap our innovative potential,” Obama told attendees at Hudson Valley Community College. “Our strategy begins where innovation so often does: in the classroom and in the laboratory — and in the networks that connect them to the broader economy. These are the building blocks of innovation: education, infrastructure, research.”

The president has released a new white paper prepared by the National Economic Council about the policies being implemented to create a broader, more inclusive and more prosperous America based on its citizens’ ingenuity.

Mass Layoffs Hit Manufacturing Hard
The latest monthly mass layoffs report from the U.S. Department of Labor indicates that 2,690 instances of mass layoffs (involving 50 or more employees) occurred in August, resulting in 259,307 workers losing their jobs. This represents an increase of 533 more mass-layoff events over the previous month and 52,516 more laid-off workers than in July.

The manufacturing sector accounted for 31 percent of all mass-layoff events and 33 percent of all initial unemployment claims in August. Within manufacturing, administrative roles experienced 14 percent of overall mass layoffs, waste services had 12 percent and construction underwent 11 percent. The transportation equipment industry suffered the highest number of average weekly unemployment claims.

The unemployment rate in the United States reached a 26-year high of 9.7 percent in August 2009, and many economists expect it will continue to rise until it peaks above 10 percent in the first half of next year, Reuters reports.

Meanwhile, positive hiring news came last week from General Motors Co., which announced on Tuesday that it plans to recall 2,400 factory workers to plants in Michigan, Indiana and Kansas, adding additional shifts to the facilities to keep them operating around the clock to meet increased demand for certain vehicles, the New York Times reports. About a month ago, GM said it would rehire 1,350 laid-off factory workers in Ohio and Ontario as it began to increase production after a year of drastic cuts; those workers are scheduled to report in October.

Ford Forecasts 2011 Profitability
In a press conference in New Delhi, India, last week, Ford Motor Co. CEO Alan Mulally said he expected his company to return to profitability in 2011, predicting U.S. sales will reach 10.5 to 11 million units in 2009, 12.5 million in 2010 and 14.5 million in 2011, Agence France-Presse reports.

According to Mulally, the outcome of this rate of sales coupled with “[t]he guidance we have given overall — because we continue to invest in new products — is that we will be profitable in 2011.”

Ford, the only major U.S. automaker to have avoided bankruptcy, has gone through three consecutive years of annual losses totaling $30 billion, with a $1.4 billion decline in the first quarter of 2009 alone, AFP reports.

Much of the company’s planned turnaround depends on expanding its presence in Asian markets. According to CNN Money, Ford is investing $500 million in its Indian manufacturing plant to expand production to 200,000 units per year, with a special focus on the new Figo model designed for the Asian small-car market. Ford has similar plans for expansion in China, preparing to construct a new factory in southern China for the production of high-end sedans and sport-utility vehicles at a volume of 300,000 units annually, Bloomberg News reports.

3PLs Cutting Costs to Meet Challenges
The recession has had a significant impact on shippers and third-party logistics providers (3PLs), who are taking widespread measures to mitigate the economic downturn’s effects on business activity, a new report shows.

According to the 14th Annual Third-Party Logistics Study conducted by Capgemini, the Georgia Institute of Technology, Oracle and Panalpina, 82 percent of shippers have implemented cost-cutting initiatives, while 60 percent are re-evaluating their roles within the supply chain and their existing relationships with 3PLs.

In addition to reducing expenses, 77 percent of shippers are also attempting to improve their forecasting and inventory management processes to better cope with economic instability.

The study, released this month, also found a disparity between how effective shippers consider 3PL services to be versus 3PLs’ own views of their contribution. While 88 percent of 3PLs believe they have had a positive effect on customer service for their clients, only 59 percent of shippers share this view. Despite the difference, 75 percent of shippers still claim that more strategic relationships with 3PL firms would help drive down overall costs.

EPA Finalizes Greenhouse Gases Reporting Rules
Following certain revisions to its initial plan, the Environmental Protection Agency (EPA) finalized its mandatory greenhouse gas reporting regulations last week.

The new rules will require an estimated 10,000 facilities nationwide to begin monitoring their emissions and collecting data for annual reports that will be entered into a registry. The registry is expected to cover roughly 85 percent of all heat-trapping emissions in the U.S. Although the plan is wide-sweeping, the initial regulations were intended to target 13,000 facilities and up to 90 percent of all emissions before being revised down, OMB Watch, a government accountability organization, reports.

Facilities that emit greenhouse gases below the 25,000 ton annual reporting threshold for five consecutive years will be allowed to exit the program. However, according to the New York Times, the EPA said it “had no firm estimate on how many businesses had the training and systems in place to report on their emissions.”

As a result, businesses without the necessary monitoring capabilities in place can request a three-month extension to delay participation in the program, which is set to begin on January 1, 2010.

“The American public, and industry itself, will finally gain critically important knowledge, and with this information we can determine how best to reduce those emissions,” Lisa P. Jackson, an EPA administrator, said in an announcement of the finalized program.