Plus: Monthly Job Losses Less than Expected, Chinese Manufacturing Rebounds and Employers Shift Health Care Costs to Workers.

WASHINGTON (Reuters) – Economic growth was revised down to a sluggish 1.6 percent annual rate in the second quarter, dampened by the largest increase in imports in 26 years, the government said on Friday.

Gross domestic product growth previously was estimated at 2.4 percent and analysts had feared it would be pushed down even more sharply, but business investment was robust enough to partially cushion the blow from imports.

Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, would be revised to a 1.4 percent growth rate. The economy grew at a 3.7 percent pace in the first three months of the year.

“The instant reaction is that it isn’t good but we thought it might be worse, so there might be a bit of relief,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.

U.S. stock index futures added to gains after the report, while Treasury debt prices extended losses. The U.S. dollar rose against the yen.

The soft GDP report came shortly before Federal Reserve Chairman Ben Bernanke addresses monetary policymakers at their annual retreat in Wyoming. Financial markets will be closely watching the 10 a.m speech for any hints the U.S. central bank may be mulling new measures to try to stimulate economic activity.

BAD POLITICAL OMEN

A slackening recovery poses a major political challenge for the Obama administration and the Democratic Party two months away from crucial mid-term elections that could shift the balance of power in Congress in favor of Republicans.

A Reuters/Ipsos poll this week found Obama’s approval rating at 45 percent, overtaken for the first time by a 52 percent disapproval rating.

Despite concerns the economy may be at risk of slipping back into recession, analysts said the most likely prospect was for continued soft expansion rather than a double dip downturn.

“There is no doubt we are losing momentum in the economic recovery,” said Robert Dye, senior economist at PNC Financial Services in Pittsburgh. “But if we define recession as two or more consecutive declining quarters of GDP, I think we are not going to go there.

“We are going to see a pattern where we may have declining GDP in one quarter followed by smaller gains in the next quarter, bouncing along the bottom as it were,” Dye said.

The recovery from the worst economic downturn since the Great Depression had been largely fueled by a $862 billion government stimulus package and businesses rebuilding inventories from record low levels.

IMPORTS CHOKING GROWTH

Growth in the last quarter was stifled by a 32.4 percent surge in imports, the largest since the first quarter of 1984, dwarfing a 9.1 percent rise in exports. That created a trade deficit, which sliced off 3.37 percentage points from GDP, the largest subtraction since the fourth quarter of 1947.

A smaller contribution from business inventories than initially estimated also restrained output. Business inventories increased only $63.2 billion, rather than $75.7 billion, adding a slim 0.63 percentage point to GDP.

Inventories, which had been a major driver of the recovery that started in the second half of 2009, increased $44.1 billion in the first three months of the year.

Excluding inventories, the economy expanded at a 1 percent rate, instead of the 1.3 percent pace reported last month.

There were some bright spots in the report, with growth in consumer spending revised up to a 2 percent rate from 1.6 percent. Consumer spending grew at a 1.9 percent rate in the first quarter.

Stubbornly high unemployment has dampened consumer spending, which normally accounts for 70 percent of U.S. economic activity. Spending added 1.38 percentage points to GDP last quarter.

Although businesses have been reluctant to hire new workers, they have been splurging on equipment and software, which also contributed to the surge in imports. Business investment was revised up to a 17.6 growth percent rate, the largest increase since the first quarter of 2006, from the previously estimated 17 percent pace.

Investment in equipment and software was the strongest since the fourth quarter of 1983. Spending on structures was revised to show a far smaller increase than previously estimated but still posted the first rise in spending on structures since the second quarter of 2008.

Growth in new home construction was revised down slightly to 27.2 percent from 27.9 percent. The sector, which was a drag on growth in the first quarter, was lifted by a spurt in building activity spurred by a popular home-buyer tax credit, which has since expired. The rate of increase was still the biggest since the third quarter of 1983.

Residential investment had contracted at a 12.3 percent rate in the first quarter.

The report also showed corporate profits rose 2.9 percent in the second quarter after increasing 5.8 percent in the first three months of the year.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

Founded in 2004, AvaLAN Wireless (“AvaLAN“) is a leading developer and manufacturer of long range industrial wireless radio technology. AvaLAN’s products are designed to enable affordable wireless connections in perimeter or remote locations. AvaLAN has grown each year since inception, shipping over 30,000 radios to networking, surveillance, digital signage, robotics, industrial automation, access control and smart grid markets. AvaLAN’s innovation concentrates on delivering robust and reliable wireless connections to devices at the network’s edge.

AvaLAN’s products have been implemented in such demanding environments as high interference indoor applications and long distance outdoor applications with range up to 30 miles. Specializing in the unlicensed 900MHz, 2.4GHz and 5.8GHz radio spectrum, AvaLAN offers a number of Ethernet bridge products and point-to-multi- point wireless networking products. AvaLAN’s products offer the ideal combination of price, data rate, security, interference avoidance, quality-of-service, and ease-of use that professional installers demand.

AvaLAN in 2010 will continue to expand their line of robust and reliable wireless products with new modules for easy integration and further expansion of solutions for machine-to-machine networking.

Made in USA Certified’s Co-founder and President, Julie Reiser stated, “In an industry that has been largely outsourced, AvaLAN’s commitment to R & D and manufacturing in the U.S.A. is a breath of much needed fresh air.”

“U.S. manufacturers perform half of all the R & D in the nation, driving more innovation than any other sector.  AvaLAN is proof that high technology R & D and manufacturing goes hand in hand and is crucial for a strong national economic strategy for jobs and a globally competitive America.”

About Made in USA Certified, Inc. (www.usa-c.com)

Made in USA Certified, Inc. is the leader in independent third party assurance verification for genuine Made in USA products and services. Seal of Certification assures consumer Made in USA or Product of USA claim is true – keeping you and your family safe, giving consumers peace of mind and helping to support and promote products and services Made in USA, one factory, one business at a time. Trust but Certify!™

TransMedia Group (www.transmediagroup.com) said it will conduct a national PR campaign for the industry leader in third party certification for genuine “Made in USA” products and services.

According to TransMedia’s founder and CEO Thomas J. Madden, the campaign will be designed to build nationwide awareness that doing business with companies showing the “Made In USA Certified” seal is one of the best things consumers and businesses can do to help the economy and create jobs.

Made in USA Certified president and co-founder Julie Reiser said TransMedia will  “maximize exposure for the Made in USA Certification program and the branding/marketing opportunity it offers companies that promote their products and or services as ‘Made in USA.’”

Madden called the Made in USA Certified Seal an “instantly recognizable symbol that shows that an independent company has verified the supply chain of a company’s product(s) and they are compliant with current U.S. laws and regulations in regards to making the claim ‘Made in USA.’”

“‘Make It in America’ is a key initiative on Capital Hill and across much of Corporate America as it has become increasingly obvious that our Nation’s economic recovery, growth and economic sustainability must consist of a strong manufacturing/jobs base,” said Madden.

House Democrats were briefed recently on a poll conducted this spring by The Alliance for American Manufacturing, which found that voters are anxious about the nation’s mounting debt to China. Key voting blocs named the loss of manufacturing jobs as a top worry, the survey found.  Additionally, White House senior adviser David Axelrod said, “We have a vision of how to build a stronger economy,” and “Make It In America is an essential element.”

Reiser said TransMedia was selected from a list of top PR firm candidates because of Madden’s and TransMedia’s 30-year-plus history representing America’s leading companies, including AT&T, Kellogg’s Company, Rexall Sundown and The City of New York, for whom the firm created a campaign promoting fair housing, which earned it a Bronze Anvil Award from the Public Relations Society of  America.”

CONTACT: Jessica Robinson

TransMedia Group

561-750-9800 x210

SOURCE TransMedia Group

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WASHINGTON (AP) — The U.S. trade deficit widened in May to the highest level in 18 months as a rebounding economy pushed up demand for imports of foreign-made cars, computers and clothing.

The trade deficit increased 4.8 percent to $42.3 billion, the largest imbalance since November 2008, the Commerce Department reported Tuesday. American exports of goods and services rose 2.4 percent but this increase was outpaced by a 2.9 percent rise in imports.

American manufacturing has been a standout performer so far in this recovery, benefiting from a global economic recovery. But the concern is that export sales will be hurt by the European debt crisis, which has dampened growth prospects in Europe.

Through May, the U.S. trade deficit is running at an annual rate of $474.8 billion, up by 26.6 percent from $374.9 billion deficit for all of 2009. That had been the lowest annual trade gap since 2001, another year when the country was in recession.

The rise in the May deficit came despite the fact that oil imports dropped by 9.1 percent to $27.6 billion as both the price of oil and the volume of shipments declined slightly.

The 2.4 percent rise in exports in May compared to April pushed sales of American goods and services to $152.3 billion, the highest level since September 2008. While sales of soybeans, wheat and other farm products were down in May, demand for American-made autos, industrial machinery, medical equipment and commercial aircraft all increased.

Imports rose 2.9 percent to $194.5 billion, the highest level since October 2008, reflecting big gains in imports of cars, computers, oil drilling equipment and industrial machinery.

The deficit with the European Union rose 7.5 percent to $6.2 billion as imports from Europe rose by 3.2 percent, ouptacing a 1.9 percent rise in U.S. exports to that region.

The concern is that American exports could falter in coming months if a debt crisis in Europe pushes that region back into recession. The debt troubles have also caused the value of the euro to weaken against the dollar this year, making American goods less competitive in the 16 nations that use the euro currency.

The deficit with China rose to $22.3 billion, the largest imblanace since last October and a 15.4 percent jump from the April deficit. So far this year, the U.S. deficit with China, the largest imbalance with any individual country, is up 10.2 percent from the same period a year ago.

The rising deficit with China at a time of high unemployment in the United States is increasing pressure on the Obama administration and Congress to adopt a tougher stance in trade disputes with China.

Last week, the Obama administration declined to cite China in a report to Congress as a country that was unfairly manipulating its currency to gain trade advantages. That disappointed American manufacturers who believe the Chinese yuan is undervalued by as much as 40 percent.

On June 19, just before leaders of the Group of 20 major industrial countries met in Toronto, China announced it was going to allow more flexibility in its currency. But critics contend that the yuan has risen in value only slightly since that time.

Sen. Charles Schumer, D-N.Y., has vowed to push for an early Senate vote on legislation that would impose sanctions on Chinese imports to the United States if Beijing does not accelerate its currency reforms.

AAM believes that America’s leadership in the information age does not mean that we have to accept defeat when it comes to manufacturing. On the contrary, the nation that has the ideas and innovation, as well as cutting-edge technology and manufacturing, to win the global economic battles of the future.

Inside modern manufacturing facilities, you’ll see the most productive, highly-skilled labor force in the world applying the latest in information, innovation, and technology.

The fact is, our manufacturing industry has been, and will continue to be, a vital component of America’s success.

Today, Manufacturing Faces Extraordinary Challenges and Opportunities

American families and communities depend on a strong manufacturing base to improve our quality of life. American manufacturers should have more opportunities to export their products and increase production in the U.S., but a staggering set of circumstances has resulted in millions of layoffs and threatens the foundation of our economy:  rising health care and retirement costs, a trend towards outsourcing jobs to low-wage countries, currency manipulation that distorts the marketplace, and unchecked cheating on international trade rules.

Some critics argue that a decline in manufacturing is inevitable. AAM begs to differ. Other sectors of the American economy—finance, information, services, technology—are clearly on the rise. But that does not mean manufacturing should decline. Just as manufacturing depends on technological advances and on access to information and finance, these sectors depend on manufacturing.

With manufacturing, America gets:

• More R&D – American manufacturers are responsible for two-thirds of research and development investment in the United States; nearly 80 percent of all patents filed come from the manufacturing sector.
• More Technology – American manufacturers are the leading buyers of new technology in the United States.
• More Jobs – American manufacturing directly employs 14 million Americans and creates 8 million additional jobs in other sectors.
• More Growth – American manufacturing is the largest single contributor the U.S. economy.

Tomorrow, America’s Success Depends on a Strong Manufacturing Base

As Federal Reserve Chairman Ben Bernanke stated on Feb. 28, 2007, “I would say that our economy needs machines and new factories and new buildings and so forth in order for us to have a strong and growing economy.”

Contrary to popular misconceptions, the industrial age is not over. In fact, just the opposite is true. From nanotechnology, and robotics, to lasers and biotechnology, we are on the cusp of incredible advances in manufacturing. America must be the nation that leads the world into the next stages of development.

Manufacturing is, and will continue to be, an integral part of the “new economy.” With manufacturing, the new economy will thrive. Without manufacturing, much of this new economy wouldn’t even exist.

Delray company takes on mission to certify products ‘Made in U.S.A.’

Please Join the

Made in USA Certified’s new facebook Fan Page

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Made in USA Certification USA.c (SM) was established to represent manufacturers, producers, pharmaceutical, and service providers of the United States of America. The organization is dedicated to educating and promoting the quality, quantity and variety of United States industry to show why we need “Made in USA” manufactured products and services.

To learn more about what it means to be “Made in the USA” visit the Web site:

http://www.madeinusacertified.com

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