Manufacturing’s loss of 17,000 net jobs in August was the sector’s worst monthly performance since July, 2013, helping to sink its share of the total American jobs universe to a record low of 8.66 percent. Domestic industry’s measly 124,000 year-on-year job gain in August was the weakest such improvement since the severe winter of early 2014, and the last ten months have been its worst such job-creation period since July, 2012-May, 2013. Manufacturing wages grew on month in August. But year-on-year wage improvement continued a slowdown that began in 2013, and the sector’s pay kept badly lagging the private sector’s overall.
Here’s my analysis of the latest monthly (August) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>In August, American manufacturing’s worst monthly job-creation performance in more than two years helped drive the sector’s share of total U.S. jobs down to an all-time low of 8.66 percent.
>The 17,000 net jobs lost by domestic industry during the month – the worst such performance since July, 2013’s 22,000 decline – brought manufacturing’s share of all non-farm jobs well below even the levels it hit during the sector’s recessionary employment bottom in February and March, 2010 (10.69 percent and 10.67 percent, respectively).
>Moreover, August’s year-on-year manufacturing job creation of 124,000 represented its lowest such growth since February, 2014’s 120,000 – which was dragged down by severe winter weather. The current August figure is also much worse than manufacturing’s employment improvement from August, 2013-August, 2014 (194,000), though it was much better than the 50,000 gain during the previous August-August period.
>In addition, the last ten months’ worth of net manufacturing job-creation (47,000) was the lowest such total since July, 2012-May, 2013’s 42,000.
>Contributing to manufacturing’s recent poor employment picture were downward monthly revisions for July (from a 15,000 net gain to 12,000) and June (from 2,000 to 1,000).
>Since manufacturing hit that last 2010 employment bottom, the sector has regained 876,000 (38.20 percent) of the 2.293 million jobs it lost during the recession and its aftermath. By contrast, the private sector overall lost 8.801 million jobs from the recession’s December, 2007 onset through its February, 2010 absolute employment low. Since then, it has since increased net employment by 13.120 million.
>In fact, whereas total private sector employment is now 3.72 percent higher than at the recession’s beginning, manufacturing employment is still 10.31 percent lower.
>Manufacturing wages rose in August on a monthly basis by 0.32 percent before adjusting for inflation. That was worse than the upwardly revised July figure of 0.52 percent, but much better than the upwardly revised 0.12 percent drop in June. August’s gain in manufacturing wages, moreover, topped the monthly improvement for the entire private sector (0.32 percent).
>Year-on-year, though, manufacturing remained a wage laggard. From August, 2014 through last month, pre-inflation manufacturing wages rose only by 1.73 percent – more slowly than the 2.20 percent improvement for the whole private sector. The latest yearly manufacturing wage gain also trailed August, 2013-2014’s 1.97 percent and the previous August-to-August advance of 2.13 percent. In January, year-on-year manufacturing wages increased by 2.23 percent.
>Since the current economic recovery began, pre-inflation manufacturing wages are up less (10.03 percent) than private sector wages (13.22 percent).
>Manufacturing’s wage performance has been even worse after adjusting for inflation, especially over the longer term. The latest Labor Department figures are from July, and will be updated later this month. But they showed that in real terms, manufacturing wages rose sequentially by 0.38 percent, but are down on net since January.
>Real total private sector wages rose by only 0.10 percent in July, and are down on net since January, too.
>Year-on-year, however, inflation-adjusted July manufacturing wages rose by a mere 1.44 percent. In the private sector overall, they increased by 1.94 percent.
>Moreover, as of July, inflation-adjusted manufacturing wages are down by 1.12 percent since the recovery officially began in mid-2009. Real wages for the entire private sector are up 1.74 percent during this period.