Hello, I'm Mark Pearson. Wall Street staged an impressive rally this week from last week's close below 12,000 despite mixed reports on the economy.
First, the bad news: In the wake of weeks of concerning economic developments, the Conference Board reported this week its Consumer Confidence Index plunged to a seven-month low in June.
Pessimism also was evident in the battered housing sector as the Commerce Department announced U.S. construction spending declined 0.6 percent in May to about half the $1.5 trillion pace considered healthy by most economists.
Now the good news: The Big Three Automakers all reported double digit sales increases in June; and there were TWO positive developments in the manufacturing sector: Both the Chicago Purchasing Managers Index and the ISM Index of Manufacturing Activity rose in June.
Those developments, Friday, stoked blazes already burning on Wall Street, where the Dow gained 168 points and settled with its largest weekly gain in nearly two years.
The manufacturing sector has been the pace-setter thus far in the economic recovery, putting together an impressive streak of 23 consecutive monthly gains. But persistent unemployment poses a threat to further expansion and this week President Obama chose a Midwestern factory as a backdrop to outline his plan to create jobs.
President Barack Obama: "And see, when change happens, you've got a choice. You can either keep on doing what you were doing and hope things work out, or you can make the decision that not only you can meet the challenges of the future, but you can help set the pace."
With the national unemployment rate languishing at 9.1 percent, President Obama brought his message of hope through American ingenuity and innovation to the Midwest this week. Speaking before hundreds of employees at the Alcoa aluminum plant in Davenport, Iowa, the President expressed his frustration at the slow pace of recovery from the worst downturn since the Great Depression.
President Barack Obama: "For better or for worse, our generation has seen more than our fair share of economic change. Revolutions in technology have changed the way we live and the way we work. A lot of jobs can now be located anywhere there's an Internet connection. And companies have become more efficient, so they get by with fewer workers."
While acknowledging that higher efficiency means fewer jobs, Obama quickly pointed out 2 million jobs had been created on his watch. According to the President, 250,000 of those positions were in manufacturing. Many of those jobs were generated by the "Big Three" automakers which came to Capitol Hill two years ago, hat-in-hand, for a government bailout.
Nevertheless, some businesses are having trouble finding enough skilled workers. To train the work force, the Obama Administration recently setup an agreement between business and education. The idea is for community colleges to create specially tailored education programs to help the manufacturing sector fulfill its job needs.
The plan includes a partnership between engineering schools and business in hopes of bringing innovations to the line quicker. Alcoa recently signed-on to the agreement.
President Barack Obama: "Now, these steps won't help solve every problem that we face. No matter what you may hear, there's no silver bullet to reverse a decade of economic challenges. We've had problems for 10 years now. It's not going to reverse overnight. But these steps will help us move forward. They'll help us grow our economy today, and they'll guarantee a better future for our children."
Later in the week, the President called on Congress to continue the trend by approving long awaited unilateral trade pacts with South Korea, Panama and Colombia. Obama, also wants lawmakers to extend payroll tax cuts and pass a bill streamlining state and construction company loan applications for road and bridge projects.