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Blog Entries from October 2011

Trading Across the Border – The United States and Mexico’s $1 Billion per Day Relationship

Juan Carlos Baker, Director General of Mexico’s Secretariat of Economy with Hector Mancha Ana Hinojosa, Director of Field Operations, El Paso Field Office with Michael Camuñez, Assistant Secretary for ITA’s Market Access and Compliance.

Guest blog post by Michael Camuñez, Assistant Secretary for ITA’s Market Access and Compliance

Last year, trade between the United States and Mexico amounted to nearly $400 billion. With 85% of that trade crossing the border each day by truck, the U.S.-Mexico border region plays a vital role in the U.S. economy. And it is open for business.

This is the message I heard last Wednesday through Friday when I visited the El Paso, Texas/Ciudad Juarez, Mexico region.

As Americans, we hear a lot about our southern border, little of it positive. Drugs, violence, and illegal immigration are what we see on television and read in the newspaper. While such stories may be in the media’s economic interest, I want to share an entirely different story that is in every American’s economic interest.

Two-way trade between the United States and Mexico amounts to more than $1 billion a day. To put the scope and depth of our relationship in perspective, consider that last year U.S. exports to Mexico exceeded our exports to Brazil, Russia, India and China combined. Remarkably, even our imports from Mexico support U.S. jobs—64% of the content of the Mexican goods we import include U.S. inputs. The continued growth of this relationship is vital to the America’s economic recovery.

And that is exactly why I went to the border—to discuss how infrastructure investments and improvements in customs procedures can facilitate increased trade.

To emphasize the need for a shared approach, I asked Juan Carlos Baker, Director General of Mexico’s Secretariat of Economy, to join me. Together, we met with many of the principal exporters on both sides of the border—maquiladora executives representing the Mexican private sector and U.S. small and medium sized business owners who comprise the maquiladoras’ supply chain. We had excellent discussions with both groups and received useful feedback, which we will incorporate into our respective government’s efforts to grow trade along our southern border.
 
We also visited The Bridge of the Americas, one of the busiest ports of entry on the entire U.S.-Mexico border where we were briefed by senior U.S. Customs and Border Protection officials regarding the challenges of advancing our dual interests: security and commerce. We communicated industry concerns and gained useful information that will inform our efforts on behalf of our respective private sectors.

Along the way, we also discussed some of the untapped potential of the border region, particularly that in renewable energy. I spoke at the U.S.-Mexico Border Energy Forum Plenary Session, where I offered insight into Commerce’s efforts to develop this sector.

What is most important is that we not lose sight of the importance of the U.S.-Mexico border to the U.S. economy and to our global competitiveness. We share much more than a border with Mexico. Our societies and cultures are inextricably linked—I should know, my family came from Mexico generations ago and settled in the border region, right near El Paso. Those ties present an enormous opportunity from which we must not be distracted.

The American Jobs Act: Personal Income and Tax Cuts

The American Jobs Act Cover

Today the Bureau of Economic Analysis released personal income and outlays for September 2011. Personal income increased $17.3 billion, or 0.1 percent, and disposable personal income increased $12.9 billion, or 0.1 percent. That number is helped by the tax cuts in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 that cut social security withholding by 2 percentage points and that resulted in about $1000 per family per year in increased income.

Knowing that increasing personal income is vital to improving our economy, the President has proposed increasing this tax cut in his American Jobs Act. Under his proposal, the payroll tax cut would be extended to firms by cutting in half their payroll tax on the first $5 million in payroll. Next year, instead of paying 6.2 percent on their payroll expenses, firms would pay only 3.1 percent. The President’s plan would provide tax cuts for all firms, with focused relief on the 98% with less than $5 million in payroll.

For example, a construction firm with 50 workers earning an average of $50,000 a year – for a total payroll of $2.5 million – would receive a payroll tax cut of 3.1% of its total payroll, or about $80,000. The firm’s workers would receive an average tax cut of about $1,500 a year from the employee side payroll tax cut in the President’s plan.

Learn more about the President’s proposed American Jobs Act on the White House website.

Census Bureau Facts for Features: Halloween, 2011

Image of jack-o-lantern, pumpkin and spider web

The observance of Halloween, which dates back to Celtic rituals thousands of years ago, has long been associated with images of witches, ghosts and vampires. Over the years, Halloween customs and rituals have changed dramatically. Today, Halloween is celebrated many different ways, including wearing costumes, children trick or treating, carving pumpkins, and going to haunted houses and parties.

Facts for Features and Special Editions consist of collections of statistics from the Census Bureau's demographic and economic subject areas intended to commemorate anniversaries or observances or to provide background information for topics in the news.  Here is this year's edition of Facts for features: Halloween, October 31, 2011

Nation’s Newest Environmental Satellite Successfully Launched

An arc of light illuminates the pre-dawn sky at Vandenberg Air Force Base, Calif., as a Delta II rocket launches with the NPOESS Preparatory Project (NPP) spacecraft payload.

NPP is vital for NOAA’s weather forecast mission

America’s newest polar-orbiting satellite roared into orbit this morning, setting the stage for enhanced weather data NOAA scientists will use to develop life-saving severe weather forecasts days in advance.

The NPOESS Preparatory Project (NPP) satellite was launched from Vandenberg Air Force, Calif., at 2:48 a.m. PDT aboard a United Launch Alliance Delta II rocket. At approximately 3:45 a.m. PDT, the spacecraft separated from the Delta II to the delight of NOAA and NASA officials.

NPP is a NASA Earth-observing satellite and features five new instruments that will collect more detailed information about Earth’s atmosphere, land and oceans.  NASA will use NPP as a research mission, while NOAA will use the data for short and long-term weather forecasting and environmental monitoring.

“This year has been one for the record books for severe weather,” said Dr. Jane Lubchenco, under secretary of commerce for oceans and atmosphere and NOAA administrator. “The need for improved data from NPP and the next generation satellite system under development by NASA and NOAA has never been greater.  They will enhance our ability to alert the public with as much lead time as possible.”

In 2011, data from polar-orbiting satellites like NPP allowed emergency managers and communities to prepare for severe weather events . Five days before a destructive and deadly tornado outbreak in Alabama and parts of the Southeast in April, NOAA forecasters were able to see the early atmospheric signs of the storm system developing and issue timely warnings.  NOAA  full release

The American Jobs Act: GDP Growth and Job Creation

The American Jobs Act Banner

Today, the Bureau of Economic Analysis (BEA) released the advanced estimate for the 3rd quarter 2011 Gross Domestic Product. The report said the U.S. economy grew 2.5% in the third quarter, compare with 1.3% in second quarter of 2011. This is a tremendous step-up from the 0.4% growth in the first quarter and 1.3% in the second quarter of 2011. The good news is that consumers increased their spending, businesses continue to invest, and our exports grew, but continued growth is vital. U.S. Commerce Secretary John Bryson said this morning, “In spite of headwinds hitting the U.S. economy, today’s GDP report – the ninth straight positive quarter – reflects strong consumer spending and export growth and continued investment by American businesses.”

This growth comes at a time when only two months ago there were fears of a double dip recession and the volatile stock market resembled a wild roller coaster. Consumer spending, factory production and exports all have increased. This type of growth to GDP shows encouraging signs of a growing and improving economy, but faster growth is needed to replace the jobs lost in the recent downturn and to reduce long-term unemployment. That's why the President has offered his American Jobs Act.

The President’s American Jobs Act has been supported by economists across the political spectrum. They have said repeatedly it will create jobs and boost economic growth.  Susan Wachter, a finance professor at the University of Pennsylvania’s Wharton School suggests, Social Security tax cuts would not only grow the economy, but create 1 million jobs in the next year. Mark Zandi, of Moody Analytics, says the American Jobs Act creatively helps fuel growth for small businesses who have been hurt most by the recession. He projects that the American Jobs Act would grow the economy at an additional 2 percentage points and add 1.9 million jobs all in 2012. 

Focusing on durable goods, preventing teacher layoffs and keeping first responders on the job, and cutting payroll taxes which will support consumer spending are three of the many measures included in the American Jobs Act that will continue to grow the economy and create more jobs. All of this will be fully paid for as part of the President’s long-term deficit reduction plan. See all of the details of the American Jobs Act on the White House blog.

Commerce Employees Saving Taxpayer Money

The BEA team with Secretary John Bryson and Acting Deputy Secretary Rebecca Blank

Secretary Bryson and Acting Deputy Secretary Blank have recognized three Commerce teams that are improving customer service and saving taxpayer money.  Teams from the Bureau of Economic Analysis (BEA), Census Bureau, and Department of Commerce Human Resources offices have received the Performance Excellence Award.

The Performance Excellence Award is distributed to teams that support the Secretary’s vision of an evolving department and continuously improve service delivery to the American public. Bryson hopes to establish the department as a role model for other federal agencies. In an effort to go the extra mile, process improvement teams are examining the department’s infrastructure to identify and remove inefficiencies.  As a result, processes are streamlined to enhance the administration and delivery of services to customers. Although the sector is very diverse, it is definitely possible to improve service delivery through department-wide collaboration.

Today, Bryson recognized three teams that have developed new processes to accelerate reduced costs and improve programs within their purview.

The American Jobs Act: New Project Rebuild and Durable Goods

Inside of a rebuilt home

Today, the U.S. Census Bureau released their Advanced Report on Durable Good for September 2011 and new orders for durable goods dipped 0.8% in September, but excluding transportation equipment (which includes the volatile aircraft manufacturing sector), new orders increased 1.7%. That's good news, but continued growth in our manufacturing sector is vital to improving America's economy and that's why part of President Obama’s American Jobs Act includes a new Project Rebuild.

This new Project Rebuild will put people back to work rehabilitating homes, business, and communities. The President is willing to invest $15 billion into this national effort to spur economic growth. This project will not only put workers back on the job, but it will enable hundreds of thousands of vacant and foreclosed homes and businesses to be rebuilt. So what does all of this mean?

Project Rebuild will create numerous jobs and provide construction workers with many new opportunities. Many citizens across the United States still continue to struggle with finding full-time employment today. This project may be the answer and is certainly one step in the right direction.

Countless buildings across the United States have been empty and rundown for too long. Project Rebuild will allow for them to be reconstructed from scratch. Once these homes and buildings are completely renovated, they will require a large number of washing machines, furniture and refrigerators to fill them. Those are all key components of the durable goods inventory and employ thousands of individuals who manufacture them.

Project Rebuild is just one way President Obama plans to improve the United States economy. See all the details of the American Jobs Act on the White House blog.

How You Can Analyze Federal Programs Using BEA Statistics: A Look at Unemployment Insurance Benefits Payments

Bureau of Economic Analysis logo

The national income and product accounts, produced by the Bureau of Economic Analysis (BEA), provide a consistent and comprehensive picture of the nation’s economy; as a result, they provide a useful tool for analyzing the economic effects of recent federal legislation designed to stabilize and stimulate the economy.   For example, it’s logical that reduced income tax rates and expanded tax credits lowered personal current tax receipts, but by how much? It makes sense that a reduction in the social security tax rate lowered contributions for government social insurance, but how do you put that reduction in context?  Or by how much did federal assistance to states increase over previous periods?  BEA’s national accounts can help you find the facts and answer these sorts of questions.

Here’s an easy and interesting example:   What government program explains the increase in government social benefits over the course of the recent recession? 

Data from the BEA show that total government social benefits, as a share of personal income, increased from 14.2 percent in the first quarter of 2008 to 18.3 percent in the fourth quarter of 2010. That’s a notable increase, but what’s behind those numbers?

Honoring Invention: the World’s Only Inexhaustible Resource

President Obama with receipients at Meddal Award ceremony.

Guest blog post by David Kappos, Under Secretary For Intellectual Property and Director, United States Patent and Trademark Office, Department of Commerce

At a ceremony at the White House Friday, I had the pleasure to join President Obama as he honored recipients of the National Medal of Technology and Innovation—the highest honor bestowed by the United States government on our nation’s brightest innovators and inventors.

Whether unraveling the information intertwined in a DNA helix, improving the safety of air travel, or digitizing the way we capture memories of loved ones—the medal recipients have offered humanity new tools to tackle some of the toughest challenges we confront as a planet. Moreover, by improving our understanding of the world around us, they have rewritten textbook fundamentals—and inspired a new generation of thinkers to explore unfamiliar terrain.

Much like the thousands of patent and trademark applications, the Commerce Department's United States Patent and Trademark Office (USPTO) carefully examines each and every day, the National Medal of Technology & Innovation serves as a reminder that our nation continues to be built by those willing to challenge traditions—willing to push the boundaries of convention and willing to test new limits in design and thought.

Pushing for Progress in the Middle East and North Africa

(Photo: ©  WEF)

Guest blog post by Francisco J. Sánchez, Under Secretary of Commerce for International Trade Secretary, Department of Commerce

Recent events have reaffirmed just how extraordinary this period is for the Middle East and North Africa (MENA).  The Arab Spring has generated a lot of hope for people across the region. However, it’s also presented a number of questions that need to be answered, many of which center around economic issues like unemployment and slow growth. 

As the World Economic Forum (WEF) put it, “Recent shifts in the Arab world, coupled with an economic contraction at the global level, have created renewed urgency for decision-makers across the region to address the unfolding economic situation.”

So, it’s fitting that, this past weekend, King Abdullah of Jordan hosted a WEF event to address job creation. World leaders gathered to discuss pressing issues including the advancement of youth and women, the impact of social media, and, of course, U.S.-Arab relations.