According to new Labor Department figures, manufacturing job creation stopped completely on a monthly basis in March, breaking a year-long string of monthly employment increases. Further, revisions drove down its gains since the sector’s February, 2010 employment bottom. Coupled with continuing major manufacturing wage lag and the ongoing jobs recession in nondurable goods, these setbacks should remind President Obama and Congress that manufacturing’s record-level trade deficits remain a major obstacle to a real, sustainable comeback for American industry.
Manufacturing’s failure to create any net new employment in August broke a string of 12 monthly job gains. Although July’s solid 28,000 payroll increase stayed unchanged, the Bureau of Labor Statistics revised June’s total down from 23,000 to 21,000.
In addition, the 2,000 job drop for the nondurable goods sector means that these industries continued to be net employment loser even since manufacturing’s overall payrolls hit their recessionary low in February, 2010.
Manufacturing also remains a major wage laggard during the economic recovery that began in mid-2009, with its hourly pay since then falling nearly 13 times faster in inflation-adjusted terms than private sector wages as a whole.
The August figures reinforced manufacturing’s status as a job-creation laggard as well. Since the economy-wide recessionary employment bottom – also hit in February, 2010 – manufacturing has regained 705,000 (30.75 percent) of the 2.293 million jobs it lost once the Great Recession officially began in December, 2007. From the downturn’s onset through February, 2010, total nonfarm payrolls plunged by 8.787 million. Since then, total nonfarm employment has risen by 9.463 million – more than 13 times faster than manufacturing employment.
Net new manufacturing job creation slowed in August on a yearly basis, too. Since August, 2013, the sector’s employment has grown by 168,000. That’s a faster rate than the 79,000 yearly improvement in January, but down from the 176,000 year-to-year gain in July.
So far this year, manufacturing’s monthly year-on-year jobs increases have averaged 107,857. That’s only just below the 109,400 monthly average during this period last year, but less than half of 2012’s 213,875 pace.
The August figures mean that manufacturing’s share of total nonfarm employment (8.74 percent) remains above its record low of 8.73 percent. At the same time, that level is still way below the 10.69 percent of total nonfarm employment the sector represented in February, 2010, its absolute employment nadir during the recession.
Manufacturing’s real wages rose by 0.10 percent from June to July (the latest available figures) – a slower rate than the 0.19 percent improvement from May to June. These wages are now up year-on-year by 0.19 percent – also a slower rate than the 0.96 percent annual rise in January.
Since the recovery technically began in June, 2009, real manufacturing wages have dropped by 2.43 percent – much more than the 0.19 percent dip for real wages throughout the private sector.