Manufacturing employment continued advancing strongly in January, but the real highlight of the new jobs report was the upwardly revised 45,000 November gain – the best monthly improvement since August, 1998. In addition, January’s preliminary year-on-year job creation of 228,000 was the strongest such increase since March, 2012. Nonetheless, the latest (December) data show real manufacturing wages flat-lined month-to-month, and the January monthly rise in pre-inflation wages didn’t even return the sector’s pay to its November levels. In addition, the weakening manufacturing labor productivity growth reported by the Bureau of Labor Statistics yesterday casts a shadow on manufacturing’s improving jobs performance.
Here’s my full analysis of the latest monthly (January) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>Today’s January jobs figures show that manufacturing employment gains have picked up considerably since last summer. Last month, the sector added 22,000 net new jobs, for its fourth straight month of job creation greater than 20,000.
>Although the January and upwardly revised December figures represented monthly employment gains slower than November’s, the November figure was a genuine milestone. Revised way up from 29,000 to 45,000, its increase was the greatest since August, 1998’s 141,000 jump. Further, in one sense, the November increase was even more impressive, since the 1998 surge followed a July nosedive in manufacturing employment of 186,000.
>Thanks partly to its recent employment improvement and to last winter’s harsh weather, January’s year-on-year manufacturing job creation gain of 228,000 was the best such reading since the 229,000 recorded in March, 2012. Also due in part to last year’s winter, manufacturing’s January 2013-14 job gains were only 122,000. Yet even after the warm up, the year-on-year increases didn’t reach the 200,000 level until September.
>This morning’s BLS data revised October’s monthly manufacturing jobs gains down from 24,000 to 23,000, but on top of the November increase, December’s 17,000 improvement was revised up to 26,000 as well.
>Manufacturing’s preliminary January employment level of 12.330 million was its highest since February, 2009 – when it totaled 12.380 million.
>The good manufacturing jobs figures, however, continue contrasting with a wage performance that still badly lags that of the rest of the economy.
> The new BLS data reveal that, adjusting for inflation, manufacturing wages flat-lined on a monthly basis in December, versus a 0.19 percent rise for all private sector workers. (Both figures are preliminary.)
>Year on year, real manufacturing wages rose by 0.48 percent in December. That increase bettered the 0.29 percent November gain, but both figures were lower than those for the private sector overall.
>On a monthly basis, pre-inflation manufacturing wages increased 0.28 percent in January. That’s an improvement over December’s 0.36 percent monthly drop, but at $24.94 per hour, still leaves these wages below November’s $24.96 level. (The December and January figures are preliminary.)
>Yet, both these monthly pre-inflation manufacturing wage changes trailed those of the private sector, where they rose 0.49 percent in January following a drop of 0.20 percent in December.
>Real manufacturing wages as of December are down 1.77 percent since the current recovery technically began in June, 2009. Since then, overall real private sector wages are up 1.07 percent.
>Nominal private sector wages are up 11.69 percent since the recovery began – to $24.75 per hour according to the preliminary January data. Manufacturing wages, though still higher at $24.94 per hour, are up only 8.34 percent.
>Despite the recent improvement, because total non-farm employment keeps growing strongly, too, manufacturing remains a job-creation laggard during the current economic recovery.
>From the start of the recession in December, 2007 through its employment bottom in February, 2010, total non-farm jobs shrank by 8.695 million. Since then, such employment has grown by 11.200 million.
>By contrast, manufacturing lost 2.293 million jobs from December, 2007 through February, 2010. Since then, it has regained only 877,000 net new jobs (38.25 percent). Manufacturing, therefore, has generated only 7.83 percent of the total jobs regained by the economy since that trough.
>As a result, although manufacturing still represented 10.69 percent of all non-farm jobs in February, 2010, its share today is down to 8.75 percent.