The index of leading economic indicators, which measure economic conditions for the coming months, rose again for the second consecutive month, hinting that the recession in the United States is "losing steam," The Conference Board announced Thursday. The index, which has been on a downward trend since July 2007, "has risen sharply in the past two months amid widespread strengths among its components," The Conference Board said.

Seven of the 10 indicators improved in May, resulting in a rise in the index of 1.2 percent. The positive contributors were the index of supplier deliveries (vendor performance); interest rate spread; stock prices; real money supply; index of consumer expectations; building permits; and manufacturers' new orders for non-defense capital goods. "With these large and extensive increases, the six-month change in the index has become positive for the first time in two years," The Conference Board said.

The the nonprofit global research group anticipates slow recovery to begin by the end of the year. The Federal Reserve predicts the economy will contract between 1.3 percent and 2 percent in 2009 and post modest 2 percent to 3 percent growth in 2010, Agence France-Presse reports.

Continuing Claims Dip
Surprising analysts and suggesting that the unemployed are finding jobs again, continuing jobless claims fell by 148,000 to 6.68 million the week ending June 6, the U.S. Department of Labor reported late last week. It was the lowest since May 9, MarketWatch notes.

"This week's claims data provided among the clearest signals yet that labor market contraction is easing," Andrew Gledhill, an economist at Moody's Economy.com, told Agence France-Presse. The drop in continuing claims for the first time in five months is "a positive sign that the recently slower pace of layoffs — albeit still elevated — is starting to have some impact," he said.

The four-week moving average, which smoothes fluctuations, also continued to fall, dropping to 615,750. Initial jobless claims, however, rose to 608,000 after four weeks of declines. The increase may be attributed to the lack of new jobs.

"Employers still cut 345,000 jobs last month, while the nation's growing working-age population requires the job market to expand by 125,000 to 150,000 a month just to keep the unemployment rate stable," the Washington Post notes.

Companies Slow Benefits Cuts
A new report from Mercer shows that "deep workforce, pay and benefit cuts are moderating," IndustryWeek says. According to the report, 58 percent of companies worldwide plan job cuts in 2009 compared to 66 percent who said they implemented workforce cuts six months before the survey. Most U.S. companies (74 percent) made workforce cuts in the six months prior to the survey, but only 64 percent plan cuts by the end of 2009.

Furthermore, 37 percent of organizations globally plan to hire even as they reduce their overall workforce. Twelve percent expect to expand their workforce.

As for salaries, 31 percent of companies anticipate their 2009 base pay budgets to be more than 2008's, 33 percent say they'll be equal and 36 percent say 2009 budgets will be less than last year's. While companies have implemented salary freezes and 57 percent have awarded smaller bonuses, a majority of companies (73 percent) do not plan to reduce employer contributions to employee's retirement funds. Nor do they (94 percent) plan to eliminate current health and group benefits programs.

A similar study done recently by Watson Wyatt Worldwide presents similar numbers, with 76 percent of companies saying they do not plan on changing how much they contribute to employee's retirement plans and 7 percent saying they will increase their contributions compared with pre-economic crisis levels. Most companies (73 percent) however, anticipate on increasing the percentage of health care costs paid by employees.

Bill Extends Aid for Clean Energy Transition
Senator Sherrod Brown (D-OH) has announced a new bill, the Investments for Manufacturing Progress and Clean Technology (IMPACT) Act of 2009, that could create a $30 billion manufacturing revolving loan fund to help automotive suppliers and other small and mid-sized manufacturers expand or establish clean energy manufacturing operations and improve energy efficiency.

The bill would also modernize the Hollings Manufacturing Extension Partnership (MEP), the federal-state partnership which provides support to small and mid-sized manufacturers. "Currently, 59 MEP centers receive slightly more than $100 million in federal funds each year, with states matching the federal contribution two-to-one," IndustryWeek explains. "The new bill would provide the MEP program with $1.5 billion in federal funds over five years to help manufacturers diversify to clean energy markets and adopt innovative, energy efficient manufacturing technologies." The manufacturing industry, which accounts for 12 percent of the nation's gross domestic product (GDP) has been contracting for 16 consecutive months.

"We can revive American manufacturing through investments in clean energy," Brown said. "This bill will help our manufacturers retool, put our auto suppliers back to work and produce clean energy technologies."

At the same time, the U.S. auto task force has shot down auto suppliers' request for $8 billion to $10 billion in additional federal aid, Neil De Koker, president of parts trade group Original Equipment Manufacturers Association, told Automotive News. De Koker said that he was told by task force adviser Ron Bloom that suppliers wouldn't get anything beyond the $5 billion already committed, but the task force would revisit the idea of more aid if parts shipments to the automakers are jeopardized by widespread supplier bankruptcies or liquidations.

Toyota Gains U.S. Market Share
With General Motors Corp. and Chrysler LLC shuttering plants, dropping dealers and cutting production lines, Toyota Motor Corp. is set to become the largest seller of light vehicles in the U.S. — a spot it has held globally since last year. "Its share of the North American light-truck and car market probably will rise to around 20 percent from 18.4 percent," the Wall Street Journal (registration required) says. GM will be in second place with 13 percent to 16 percent of the market.

Gaining market share may be some comfort to Toyota whose U.S. sales are down 39 percent so far this year through May. In the first quarter of 2009, it lost $7.74 billion compared to GM's $6 billion loss in the same period. The company projects an overall loss of $5.5 billion for its current fiscal year.

While strong everywhere else, Toyota is a laggard in China, one of the few places where auto sales are strong. GM's Chinese operations on the other hand, are posting record sales. In May, GM saw a sales increase of 75 percent from a year earlier. "If the current trend holds, GM China will soon be larger than GM U.S.," the Detroit Bureau reports.

U.S. to Launch High-Speed Rail Network
In an effort to rival the express trains in France, Spain, Japan and China, the U.S. Department of Transportation (DOT) announced guidelines on how to apply for grants to build a national network of high-speed rail corridors.

"The guidelines [...] require rigorous financial and environmental planning to make sure projects are worthy of investment and likely to be successful," according to the DOT. "The program will offer grants for both planning and construction so that states can apply for funds no matter what stage of development their project is in."

A total of $9 billion has been allocated for this project. "Rail travel will encourage economic growth and create new domestic manufacturing jobs, while reducing pressure on our highways and airways," Federal Railroad Administrator Joseph Szabo told Agence France-Presse. Per the guidelines, proposals will be considered on the merits of their ability to make train trips faster, reduce congestion on highways and airports, and meet other environmental, energy and safety goals.

The Federal Railroad Administration will award the first round of grants by mid-September.

Dreamliner Scheduled to Make First Flight
After years of delays, The Boeing Co. is readying the 787 Dreamliner for its first test flight, scheduled to happen by June 30. This puts the delivery date of the first plane in the first quarter of 2010 to All Nippon Airways.

The company has delayed the Dreamliner's maiden flight four times since the program was launched in 2004 due to production problems. It has built six Dreamliners for the flight-test program. The 787 is Boeing's first new model in more than a decade. According to the company, the Dreamliner will use 20 percent less fuel and create 20 percent less emissions than similar-sized planes because it has 50 percent plastic composites.