Tags

, , , , , , ,

This morning’s new Labor Department jobs report showed that manufacturing employment’s recent run of strong monthly employment creation ended in February, with industry’s net new hiring hitting its lowest level since July, 2013 (when it fell by 22,000). The preliminary February figures also revealed a four-month low (208,000) in year-on-year manufacturing job creation.

In addition, the report revealed that February’s manufacturing wage growth fell following January’s small spike, and even topped the private sector’s improvement month-to-month. But manufacturing workers’ pay increases continued to lag those of their other private sector counterparts during the current economic recovery. In fact, despite a large monthly inflation-adjusted wage increase recently reported for January, real manufacturing wages are still down since the last recession technically ended in the second quarter of 2009.

Here’s my full analysis of the manufacturing data contained in this morning’s Labor Department jobs report:

>Manufacturing added only 8,000 net new jobs in February – many fewer than the 27,000 average improvement from October through January. (Both the January and February employment figures are still preliminary.)

>Moreover, January’s originally reported 22,000 hiring increase was revised down to 21,000, and December’s advance was revised down from 26,000 to 19,000.

>As a result, February’s year-on-year manufacturing job gains (208,000) were the sector’s lowest improvement since October’s 197,000.

>Manufacturing’s preliminary February employment level of 12.330 million was still its highest since February, 2009 – when it totaled 12.380 million.

>The February Labor Department figures (which are preliminary), moreover, confirm manufacturing’s status as a serious wage laggard during the current economic recovery.

>The sector’s pre-inflation wages actually rose more over January levels (0.16 percent) than those for the private sector overall (0.12 percent). But that’s less than January’s 0.40 percent monthly increase for manufacturing (which was revised up from 0.28 percent).

>Moreover, pre-inflation manufacturing wages are only up 8.64 percent since the current recovery began in mid-2009. Overall private sector wages have risen by 11.82 percent during this period.

>Year-on-year, manufacturing wages in current dollars were up 1.26 percent in February. Overall private sector wages were up 1.98 percent.

‘>Adjusted for inflation, however, manufacturing’s wage performance since the recession’s end is even worse. In real terms, manufacturing wages increased in January (the latest available figures) by 1.04 percent over December levels. But that impressive gain – following December’s flat-line – trailed the comparable 1.25 percent for the overall private sector.

>Moreover, as of January’s preliminary figures, inflation-adjusted manufacturing wages have risen 2.29 percent year on year. That’s much higher than the fractional gains seen for most of 2014. But this latest manufacturing increase was less than the 2.43 percent advance for all private sector workers.

>In addition, since the recovery, real manufacturing wages are down 0.75 percent. Private sector wages on the whole are up 2.23 percent after inflation.

>Despite the recent improvement, because total non-farm employment keeps growing strongly, too, manufacturing also 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 11.477 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 7.64 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 8.74 percent.

Advertisements