Orders for U.S. manufactured goods fell 2.1 percent in June across the country, the Commerce Department announced Wednesday, worsening fears the nation’s economy remains stuck in a rut.

In the Midwest, manufacturing data was more mixed.

On Wednesday, the Federal Reserve Bank of Chicago said its Midwest Manufacturing Index fell 0.1 percent in June to a seasonally adjusted level of 84.0, a mark essentially unchanged from May. Gains in the steel and machinery sectors offset a 1.3 percent decline in auto sector production.

The steel and machinery sectors increased output by 1.7 percent and 1.0 percent, respectively, according to the Chicago Fed.

Overall, regional output rose 7.1 percent from June 2010 levels and national output increased 4.1 percent year over year.


Three stories making news across the Midwest today:

1. How default may affect Chicago. The city of Chicago plans to borrow $800 million later this year. A short-term debt default wouldn’t affect those plans, but could affect interest rates. Crain’s Chicago Business analyzed what a downgrade of the federal government’s credit rating would mean for the city and state of Illinois: the addition of “hundreds of millions of dollars in interest costs to bonds.”

2. Demand for manufactures goods falls. Orders for U.S. manufactured goods fell in June and another barometer of business spending declined, deepening worries that the economy’s current slump could worsen. The Commerce Department said Wednesday that durable-goods orders fell 2.1 percent, according to Reuters. That follows a 1.9 percent increase in May. Capital goods orders, excluding aircraft, fell 0.4 percent in June.

3. Fuel-economy deal ahead. Officials in the Obama administration say recent changes will make it easier to reach a deal with automakers to increase fuel economy. A proposal for light trucks to get 56.2 miles per gallon by 2025 has been lowered to 54.5, according to the Associated Press. Last week, Michigan lawmakers said the higher proposal was “overly aggressive.” In 2009, automakers reached an agreement to boost fuel-economy standards to 35.5 miles per gallon by 2016.


House lock has prevented some homeowners from moving for better jobs, but the problem isn’t affecting the nation’s overall unemployment rate in a substantial way.

That’s the conclusion of a study authored by the Federal Reserve Bank of Chicago, which found scant evidence of a link between geographic immobility and a national unemployment rate that reached 9.2 percent in June. The study was released Wednesday.

Using census data, the economists compared state-to-state migration rates among both homeowners and renters and found neither group had veered from historical recession rates. “We find that homeowner and renter migration rates fell roughly in tandem,” Fed vice president and advisor Daniel Aaronson wrote. “The difference is economically small.”

Some observers had believed that house lock, the economic malady in which homeowners are reluctant or unable to sell their homes because of diminished values, had kept some workers from relocating for new jobs and contributed to the unemployment rate.

But Aaronson wrote that differences in movement were nearly identical across markets in a variety of economic conditions. In the data unearthed in the Survey of Income and Program Participation, markets battered by the recession showed the same migration patterns as those that faced less tumult.

“There is little empirical evidence that house lock has been an important driver of the recent high unemployment rate,” he said.


Three stories making news across the Midwest today:

1. Borders on brink of liquidation. Creditors objected to an offer for Borders Group on Wednesday, leaving the bankrupt bookstore chain on the verge of liquidation Thursday, according to Forbes. Najafi, a private-equity firm, had offered $215 million for the Ann Arbor, Mich.-based company plus the assumption of debt. In court filings, creditors said they believe a bid from Hilco Merchant Resources and Gordon Brothers would return nearly $284 million.

2. Chicago powerplant nears approval. Illinois governor Pat Quinn approves of a plan to build a $3 billion coal-to-gas plant on the southeast side of Chicago. The plant, according to partner station WBEZ, will “turn Illinois coal and refinery waste into a natural gas substitute without having to burn the coal.” Quinn had initially feared the project would adversely affect consumers but said changes have been made. Regulators must still approve the project before construction begins.

3. Ohio governor seeks teacher input. Gov. John Kasich has ruffled the state’s teachers unions with plans for retooling standards and implementing merit pay. Now he says he’d like teachers to help him develop those policies. “As far as I’m concerned, I can keep my hands off this thing as long as they deliver a good report,” Kasich tells our partner station Ideastream. As a result of the changes, the governor says teachers could earn more money in the long term.


Mayor Rahm Emanuel has announced significant changes in Chicago’s not-for-profit economic development organization.

He’s expanded the board of World Business Chicago from 15 to 50 members and widened its charge to include recruiting corporate headquarters from international locations. Most of the new board members will come from the corporate world, including new vice chairman Michael Sacks, the CEO of Grosvenor Capital Management.

As the board expands its reach beyond the United States, it also may look inward. Earlier this year, the Chicago Tribune reported that Emanuel’s top economic advisor wanted the organization to work with small-business startups.

“There is no better representative about the strengths of the city of Chicago than the people who live in the city of Chicago,” Emanuel said, according to Crain’s Chicago Business.


Three stories making news across the Midwest today:

1. Unemployment rate edges up in June. A monthly report from the U.S. Labor Department showed the nation’s economy added just 18,000 jobs in June and the unemployment rate rose a tenth of a point to 9.2 percent. Economists were disappointed with the report, and suggested higher energy prices, weak consumer confidence and other problems were to blame. “Unless hiring picks up, there is a reason to be concerned about whether we can grow at 2.5 percent for the rest of this year,” economist John Canally told The New York Times.

2. Detroit home prices sharply decline. Weighed down by a large stock of inventory, home prices in Detroit fell 19.8 percent during the first half of 2011 compared to the same period one year earlier, according to our partner station Michigan Radio. Alex Villacorta of Clear Capital says home prices are expected to dip another 4 percent by the end of 2011.

3. A steel mill’s second act. Bored this weekend and looking for something unusual to do? The Dave Matthews Band Caravan kicks off a three-day concert tonight in Chicago on the 600-acre former site of a giant steel mill once operated as U.S. Steel’s South Works facility on the mouth of the Calumet River. Once a brownfield site, our partner station WBEZ reports that more than 200,000 concertgoers are expected this weekend. Next year, the site is slated for redevelopment.


Three stories making news across the Midwest today:

1. Complications from Asian carp fight. A leading Indiana lawmaker says efforts to keep Asian carp out of the Great Lakes could cost thousands of workers their jobs in northwest Indiana.  Mike Pence, a U.S. Representative and possible Republican candidate for governor in 2012, wants a review of how closing Chicago-area waterways could impact industry in Indiana, reports WBEZ, our partner station.

2. Ohio study: subsidies fuel sprawl. Tax breaks intended to keep companies in Cleveland and Cincinnati instead exacerbated wealth disparities and fueled suburban sprawl, according to a new report. A study of 164 companies which received tax deals showed “they moved jobs away from areas hardest hit by plant closings and with higher rates of poverty, unemployment and people of color to more affluent and less diverse areas,” says the report, financed by the Ford Foundation.

3. Brownfield sites slated for cleanup. Six industrial sites in northeast Ohio will receive nearly $8 million for cleanup and renovation efforts. Approximately half that money will go to two brownfield sites in Cleveland that officials hope to turn into a medical office building and a senior center. “Hopefully, we can fund projects so that something new can happen on the property,” Clean Ohio spokesperson Amy Alduino tells WKSU.


Three stories making news across the Midwest today:

1. Mixed news for Midwest economy. The Midwest economy is still growing, albeit not at as fast a pace as previous months. That’s the conclusion of a report issued today from the Federal Reserve Bank of Chicago. The Midwest Economy Index decreased to +0.83 in May from +0.94 in April. It remained above its historical trend for the 15th consecutive month.

2. Chicago mayor: 625 could lose jobs. If unions do not make concessions that help the city of Chicago save $16 to $20 million by tonight, Chicago mayor Rahm Emanuel says 625 city employees could face layoffs. An agreement on labor concessions through the first six months of the year expires at midnight tonight, according to our partner station WBEZ.

3. SB5 opponents deliver signatures to Columbus. Protesters of an Ohio bill that limits collective-bargaining rights of public employees descended upon Columbus on Wednesday. Approximately 6,000 people delivered nearly 1.3 million signatures to the statehouse in hopes of placing a referendum on SB5 on the state’s November ballot, our partner Ideastream reported.


 

 

 

Felicia Ferrone and her partner hope their project “Shared Practice” will bring more attention to Chicago area designers and manufacturers

Designer Felicia Ferrone worked as an architect for six years in Milan, Italy before returning home to Chicago a year and a half ago. She now runs her own design practice and wishes Chicago had more of a reputation as a design center.

Ferrone thinks what has kept Chicago from being better known is its Midwestern work ethic.

“Everyone is just busy working, instead of clamoring for attention,” she said.

Ferrone and her business partner David M. Krell are now trying to bring more attention to the city’s designers and manufacturers. They have just launched a new project called Shared Practice. It’s a web-based project in which designers share resources and publicize what they’re doing.

Ferrone got the idea when she was selected to show several pieces at a downtown gallery last year. She designed her pieces and wanted to try to get them all made locally. “I was totally surprised,” she said. “We were able to get everything made within a one-mile radius of the downtown loop, except for one piece, and that we had made in Indianapolis.”

She says there are very few places that can manufacture high-end materials and pieces in the United States, so many designers still send their designs to be made in Europe. She thinks if Chicago would stop underselling itself, it could gain part of this lucrative market, which includes the manufacture of, for example, Ferone’s own “Tuck” benches, which sell for about $5,800 each.

Ferrone and Krell plan to expand Shared Practice to other cities, including New York, this fall. But Ferrone says she is happy to be working in Chicago. “I came back here for a job. And I thought, ‘I’m giving up a lot for this.’” But, she later added, “I’ve never been so professionally satisfied in my life.”

She thinks Chicago can continue to make design a much larger part of its economy and identity. “The impact of design is everything from Millenium Park to the many schools that are teaching design, to the manufacturers that make the pieces,” She says. “It is so important to this city.”


Here are three stories making news across the Midwest today:

1. Ohio wrangles over water rights. Despite the opposition of two former Republican governors, two natural resource directors and environmentalists, the state senate could vote as early as today to approve a bill that allows businesses to withdraw up to 5 million gallons of water per day from Lake Erie. Our partner station Ideastream reports critics of the measure believe it violates the Great Lakes Compact.

2. Chicago mayor seeks union concessions. His predecessor counted on $32 million in labor concessions to balance the 2011 city budget. But with six months remaining in the year, an agreement between Chicago city officials and public employee unions is about to expire. New mayor Rahm Emanuel is negotiating with union leaders to save $16 million over the next six months, WBEZ reports. The current agreement expires Thursday.

3. Moderate growth expected in Upper Midwest. Citing rising employment, expanding manufacturing and increasing consumer spending, the Minneapolis Federal Reserve issued an upbeat economic forecast for the Upper Midwest on Monday. The report predicted moderate growth over the next 12 to 18 months, but drew skepticism from several other economics, who believe data does not support the favorable outlook.