Plus: U.S. Factory Orders Jump, Job Growth Remains Stagnant and Worker Productivity Falls.

U.S. Factory Orders Jump in July
New orders for goods manufactured in the United States rose 2.4 percent in July to total $453.2 billion, the largest increase since March, the U.S. Department of Commerce reported last week. Following a revised 0.4 percent drop in June, factory orders were projected to rise 2 percent in July, according to a Bloomberg survey of 59 economists.

Excluding the volatile transportation categories, orders rose a more modest 0.9 percent in July, still the best showing for demand growth since March.

The Commerce Department report shows that orders for durable goods — products expected to last at least three years — climbed 4.1 percent in July, slightly better than the 4 percent increase projected in a preliminary estimate. Orders for non-durable goods like chemicals and food were up 1 percent in July after a 0.2 percent increase in June.

Orders for motor vehicles and parts jumped 9.8 percent, the largest one-month gain since January 2003. According to a separate report last week, month-over-month auto sales rose slightly in August, defying forecasts for a slowdown. Detroit automakers posted double-digit percentage gains from year-earlier sales.

However, bookings for capital goods excluding aircraft and military equipment — a key category used to gauge future business investment plans — fell 0.9 percent after rising 0.8 percent the prior month. Shipments of those goods, used in calculating gross domestic product, fell 0.2 percent after a 2 percent gain in June.

Meanwhile, shipments increased 1.6 percent to total $453.2 billion in July, following a 0.6 percent increase in June, and factory inventories rose 0.5 percent in the latest month.

No Job Growth Leaves Unemployment Rate Unchanged in August
The struggling U.S. economy added no new jobs in August, leaving the national unemployment rate unchanged at 9.1 percent, according to the U.S. Department of Labor last week. The troubling data have reignited concerns about another economic downturn.

Last month was the first time since 1945 that the U.S. reported a net job change of zero. Although the private sector added 17,000 jobs in August, down from 156,000 in July, the gain was offset by losses in government employment. The manufacturing industry shed 3,000 jobs last month, following a 36,000 gain in July and marking the first jobs decline since October 2010. For the last four months, manufacturing has added an average of 14,000 jobs per month.

“The problem is less that companies are laying people off than that they are not hiring,” the New York Times explains. “Consumers and employers alike seem almost frozen in place, with many economists saying that they seemed paralyzed by uncertainty about the future after the brinksmanship of the debt ceiling debate, the ensuing cut in the United States credit rating by Standard & Poor’s, stock market whiplash and more bad news from Europe.”

The weakness in jobs data was amplified by downward revisions to job growth in June and July, with gains for those months reduced by 58,000. Policymakers are expected to increase their efforts to revive job creation and rebuild public confidence in response to the latest findings.

Work Productivity Declines in Q2
Worker productivity in the U.S. non-farm sector decreased at a 0.7 percent annual rate in the second quarter of 2011, as output rose 1.3 percent while hours worked jumped 2 percent, the U.S. Department of Labor reported last week. However, between Q2 2010 and Q2 2011, worker productivity increased 0.7 percent.

Productivity in the manufacturing sector fell at more than twice the national rate, dropping 1.5 percent in the second quarter. Manufacturing output for the period rose 1.2 percent while hours worked climbed 2.7 percent. Over the last four quarters, manufacturing productivity has risen 2.4 percent.

Unit labor costs, which measure the cost of labor needed to produce one unit of output, grew 3.3 percent in the second quarter, as hourly compensation gains outpaced productivity, and increased 1.9 percent over the past four quarters. In manufacturing, unit labor costs increased 4.6 percent in Q2 and 0.4 percent in the last four quarters.

Industry Leaders to Double Engineering Internships in 2012
In a bid to help schools train more students for jobs requiring math and science skills, 45 industry leaders last week agreed to double the number of engineering internships they offer at their companies in 2012.

Announced by President Barack Obama’s Council on Jobs and Competitiveness, in partnership with the Business Council, the Business Roundtable, the U.S. Chamber of Commerce, National Association of Manufacturers (NAM) and the American Chemistry Council, the commitment from high-tech, health care, financial and other companies will create about 6,300 new engineering internships.

“Advanced education and training is becoming increasingly more important to manufacturers,” NAM President and CEO Jay Timmons said in a statement. “If employees do not have the right training and skills, manufacturers in the United States will fall behind our competitors, harming our economic growth.”

The internships will help meet the administration’s goal of increasing the number of engineering graduates each year from U.S. colleges and universities by 10,000, bringing the total to about 130,000 annually.