Manufacturing: The Economy's Shot in the Arm?

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There is mixed news on the job front.

Manufacturing jobs are on the rise, with 173,000 positions created in the past 12 months. The sector is growing much faster than the overall economy.

But other businesses have cut back on hiring, which means more Americans are filing applications for unemployment benefits.

Some economists say manufacturing could be the engine that drives the U.S. economy back to health.

In Topeka, Kan., Mars Incorporated is making a $250 million investment by building its first new American factory in 35 years.

"I hope it tells Americans that we can build jobs. We can recovery our economy. By keeping jobs in the U.S., we can be highly competitive," said Mike Wittman, vice-president of supplies at Mars North America.

Mars' new investment will create 200 new jobs immediately and as many as 1,000 more in the years ahead.

In North Carolina, a machining facility is moving into an abandoned Volvo plant and putting more than 360 people to work.

"This is a company that makes things again. We are manufacturing products in North Carolina and that is what's so important," said Gov. Bev Perdue.

Just this week, Chesapeake Bay Candle opened its very first manufacturing plant in the U.S. after making all of its candles in China and Vietnam for 17 years. The new plant will create 100 new American jobs.

"It is becoming a lot more economic to produce in the United States for consumption in the United States," said Hal Sirkin, senior partner and managing director of The Boston Consulting Group.

Still, there's more evidence the labor market is also struggling to create other jobs.

A new report from the Labor Department shows the number of people applying for unemployment is at a seasonally adjusted rate of 428,000. Applications for benefits have topped 400,000 for 12 straight weeks.

High gas prices are among the temporary setbacks that have been blamed for the rise in unemployment. Analysts say gas prices have cut into consumer spending and have prompted many companies to cut back on hiring.

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