US Business and Economy

The US engine maker Cummins Inc. recently lowered its 2012 forecast. This is the second time this year that they’ve made a move of this sort. They have also said that they plan to cut as many as 1500 jobs. They expect full-year sales of $17 billion, which is $1 billion less than their previous prediction.

As William Blair & Company analyst Lawrence De Maria said, “Investors expected a guidance cut from Cummins this quarter but this does look to be a bit more than expected.”

As Chief Executive Tom Linebarger explained, “Demand in China has weakened in most end markets and we have also lowered our forecast for global mining revenues.” Linebarger explained that they do plan to take actions to offset the fall in the demand. They will have work-week reductions, shutdowns at some of the manufacturing plants and targeted workforce reductions. They plan to cut between 1000 and 1500 jobs by the year’s end.

With America finally getting a real break from its long drawn out recessional nightmare, there is an air of optimism apparent throughout world markets.  Given that in July 2012, the superpower has encountered better-than-expected hiring – 163,000 – this has added fuel to the notion.  As well as creating additional jobs, it has helped reduce fears about America’s economy in general.

But critics have suggested that these statistics are just that – statistics – which cannot be relied upon 100%.  Other figures show that there has been an increase in the level of unemployment to 8.3 percent which contradicts the air of optimism created by the additional job openings in July.  Still, it helped to soften the blow that less-than-positive comments made by Mario Draghi, President of the European Central Bank, made last week.  But his words did leave room for some debate.  True, he did shed disappointment on some market expectations, but, at the end of the day, investors look at it as opening the bond markets for potential additional investments.

Oil

There was a slight drop in oil at the beginning of last week too, but still, it wasn’t too great as to deflect from its previous high that was reported after America’s impressive employment growth.  When the dollar is stronger, oil prices are often lowered and there is a greater sense of optimism vis-à-vis an improvement in the economy as a whole.

Romney’s Rationales

What is the good word from potential US president Mitt Romney? He believes America’s economy has to take “dramatic” measures to recover from its recession…still. It shouldn’t be resting on its laurels.  But he doesn’t believe the method should be increased government.  Rather “incentives and opportunities” should be created for all businesses, enabling them to increase their hiring capacity (as was already witnessed last month).  In other words, the positive escalation in America’s hiring trend needs to continue.

To do this, Romney promotes a reduction in individual and corporate taxes; lowering of government expenditure and facilitating the regulations for energy companies which would result in the US becoming energy-independent by the year 2020.  With this financial plan, he believes a further 12 million jobs would be created by the time he completes his four-year term.  Conversely, Obama’s tax plan, Romney insists, would “kill jobs” due to tax increases.  It is the middle class he argues – those who need to find jobs – who need the most help, as opposed to the wealthy who don’t require such assistance.

So, today, while certain figures indicate that America’s economy is well on the road to recovery and waving goodbye to recession, there is still much work that needs to be done to ensure this is a real trend – covering the entire economic spectrum – that will continue long-term.

According to a recent survey by Manpower Group, the global employment service giant, companies are very hesitant about hiring at the moment. Managers in many companies are nervous about investing in more staff until they see a sharp and steady rebound in demand for what they offer.

As Manpower Chief Executive Jeff Joerres said, "Companies are in tune with their demand and surroundings. Hiring has been put into only-if-necessary mode. They can spring back, but there were too many times in the last 36 months when they thought it was safe to go in the water and only found out it wasn't."

Last month, the U.S. economy only added 69,000 jobs, which was less than half of what was expected. And the unemployment rate went back up, and stood at 8.2%.

Some impressive entrepreneurs are using environmental awareness and the “go green” philosophy to turn a pretty profit. Former Brigham Young University student and CEO and co-founder of the startup, EcoScraps, Dan Blake is one example.

Launched in 2010, his business sells compost and potting soil in Utah, Colorado, Arizona and New Mexico. With 25 employees, EcoScraps takes food waste from grocery stores and farms and brings it to their compost facility. They then sell their products to consumers for less than other organic compost and soil companies.

Clean the World, another example, has partnered with hotel chains in Orlando and the surrounding area to collect thousands of bars of used soap.  The soap, which comes from major hotel chains like Walt Disney Hotels, Starwood, InterContinental Hotels Group and others, is sterilized, melted and reshaped into new bars of soap.  Since starting in 2009, founders Shawn Seipler and Paul Till have distributed over 10 million bars of soap to 45 countries and have diverted over a million pounds of landfill waste.

Both ideas show a brilliant ability to think outside the box and to turn a profit while helping those in need and the environment.