I’ve always considered the U.S. manufacturing output figures to be much more important than the manufacturing jobs figures, since it’s impossible to boost industrial employment without more industrial output. Moreover, productivity gains in manufacturing have been genuine — and robust — for decades. Therefore, payrolls aren’t the best measure of manufacturing’s health, and consequently don’t shed incredibly bright light on the issue of whether the sector is enjoying or verging on a renaissance.
But manufacturing workers, and former manufacturing workers, are human beings, and their story naturally appeals to journalists and many well-intentioned folks generally (at least sometimes). Moreover, these workers and ex-workers vote, so they’re often of great interest to politicians. So there’s no doubt that the manufacturing employment scene is worth following.
This morning, the June manufacturing jobs numbers were released by the Labor Department, along with the rest of the data on the national employment scene. They definitely contained some good news, in the form of solid monthly and year-on-year manufacturing job gains. At the same time, these data also revealed that American industry still badly lags the overall economy in job creation, and that its durable goods sector is mired in a multi-year slump. Further, the latest (May) data show that manufacturing wages keep falling faster than overall wages. Here are the details:
June’s 16,000 manufacturing jobs gain was the best monthly performance since February’s 20,000. In addition, the May employment improvement was revised up from 10,000 to 11,000, and the April rise from 4,000 to 8,000.
Nonetheless, manufacturing’s share of total nonfarm employment actually dipped from an upwardly revised 8.74 percent in May to a new record low of 8.73 percent.
Manufacturing’s job gains since its recessionary employment bottom in February, 2010 have totaled 668,000 – 29.13 percent of the jobs it lost from the recession’s December, 2007 onset through that date.
By contrast, total growth in nonfarm jobs (the Bureau of Labor Statistics’ U.S. employment data universe) during that period has been 9.125 million – nearly 13.70 times greater. And the overall employment in the overall economy is now 0.35 percent higher than when the recession began.
Moreover, the large nondurable goods sector lost 1,000 jobs on net in June. At 4.640 million workers, its employment levels stand below even those to which it fell in the February, 2010 overall manufacturing jobs bottom (4.470 million).
Manufacturing’s year-on-year jobs growth continued accelerating in June – to 130,000 from the 79,000 improvement in January. Yet through June, manufacturing’s average year-on-year monthly job gain has still only been 96,670 – lower than the 109,400 level for 2013 and less than half of 2012’s 215,600 level.
Finally, the rise in manufacturing hiring continues to be clouded by the sector’s poor wage performance. Since the current recovery technically began in June, 2009 through May (the latest available data), total private sector hourly pay has edged down by 0.19 percent when adjusted for inflation. Real manufacturing wages have decreased by 2.71 percent during this period, and fell month-on-month and year-on-year in May.
Manufacturing’s lagging recent hiring progress and ongoing wage decline add yet again to the abundant evidence documenting that industry’s jobs rebound earlier during the economic recovery was purely cyclical, not structural, and that contrary to President Obama and others, it’s anything but a sign that a structural domestic manufacturing renaissance is in sight.
Moreover, if history is a guide, the kinds of new trade agreements President Obama could complete with fast track negotiating authority from Congress will put further downward pressure on manufacturing job creation.
Here’s a link to the new jobs report, so you can examine the raw figures yourself!