It’s like a sick joke. As the National Association of Manufacturers and other industry groups celebrated “Manufacturing Day” today, the new monthly jobs report told us that the sector’s employment creation has sunk into stagnation territory. Indeed, its share of total U.S. jobs has hit a record low, and its wages remain much weaker than those of the private sector overall. Moreover, a jobs recession in the large non-durable goods sector proceeded even deeper into its fourth year.
Here’s my analysis of the September manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
Manufacturing employment inched up by 4,000 in September, but August’s zero job-creation figure was revised to a 4,000 loss (the first monthly decline since last July), and July’s 28,000 gain was revised down to 24,000.
This stagnation forced manufacturing’s share of total nonfarm employment (the Labor Department’s U.S. employment universe) down to just under 8.72 percent in September – far below even the figure registered by the sector during its February, 2010 absolute employment bottom (10.69 percent).
As a result, manufacturing cemented its status as a major job-creation laggard during the current recovery. Since that 2010 employment bottom, the sector has created only 701,000 of the 9.78 million non-farm jobs created during this period – 7.15 percent. And whereas total non-farm employment now exceeds its pre-recession level by 1.08 million, manufacturing has regained only 30.57 percent of the 2.293 million jobs it lost during the downturn.
Manufacturing wages adjusted for inflation rose by five cents an hour (0.48 percent) in August (the latest available figure) after dropping by a penny (0.10 percent) in July. Real wages in the sector also increased by three cents an hour (0.29 percent) over last August’s level after flat-lining year-on-year in July. But these modest increases still mean that real manufacturing wages are down 2.15 percent since the recovery began in June, 2009 – compared with a 0.29 percent increase in overall private sector wages after inflation.
In addition, the 3,000 September job drop for the nondurable goods sector means that these industries continued to be net employment losers even since manufacturing’s overall payrolls hit their recessionary low in February, 2010.
Net new manufacturing job creation is still up in 2014 on a year-on-year basis – from 79,000 in January to 161,000 in September. But it’s now lower than the 172,000 peak hit in July. At the same time, manufacturing’s average monthly year-on-year jobs increase this year (119,333) is well above the comparable 2013 figure (76,333).
In other words, Manufacturing Day my foot!