Manufacturing’s job-creation performance reversed course in December, with the 8,000 employment gain its best monthly figure since July’s 9,000, and upward revisions for November and October. But these advances were not strong enough to lift the sector out of a technical jobs recession, as employment is still 2,000 below May levels. Moreover, manufacturing’s December 30,000 year-on-year jobs increase was its weakest since July, 2013’s 22,000.
Largely as a result, manufacturing’s share of total non-farm employment hit another new record low – 8.61 percent. Wages, moreover, fell on month for the first time in six months and their improvement – along with that of the sector’s employment – remains a major laggard during the current economic recovery.
Here’s my analysis of the latest monthly (December) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>December brought some much-needed good news on the manufacturing jobs front, as the sector enjoyed its best job-creation month (8,000) since July’s 11,000. Revisions were positive as well, with November’s initially reported 1,000 decline now judged to be a 2,000 increase, and October’s 1,000 improvement upgraded again to 3,000.
>Nonetheless, these increases were not strong enough to lift manufacturing out of a technical jobs recession. Its employment levels are still down cumulatively by 2,000 over the last seven months.
>Manufacturing’s 30,000 year-on-year December boost in employment, moreover, was the weakest since July, 2013’s 22,000. In fact, between December, 2013 and December, 2014, manufacturing employment rose by 215,000.
>Largely as a result, manufacturing’s total December employment of 12.331 million hit another all-time low as a share of total non-farm employment – 8.61 percent. When manufacturing hit its last employment nadir, in February and March, 2010, its share of total non-farm employment was 10.69 percent and 10.67 percent, respectively.
>Since manufacturing hit its 2010 employment bottom, the sector has regained 878,000 (38.29 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 increased net employment by 14.069 million.
>In fact, whereas total private sector employment is now 4.54 percent higher than at the recession’s beginning, manufacturing employment is still 10.29 percent lower.
>Manufacturing remained a major wage laggard during the current economic recovery as well in December. During that month alone, its slight sequential pre-inflation wage decline (0.04 percent) equaled that of the overall private sector. But its year-on-year wage improvement of 2.49 percent – its best since March, 2014’s 2.53 percent – still trailed the private sector’s 2.52 percent.
>Moreover, by September, that good March, 2014 yearly gain had been cut nearly in half – to 1.35 percent. It’s an open question whether the latest wage increases will last longer.
>Longer term, manufacturing’s wage-laggard status is even clearer. Since the current economic recovery began, in mid-2009, its pre-inflation wages are up less (10.73 percent) than overall private sector wages (13.90 percent).
>Manufacturing’s wage performance has lagged after adjusting for inflation as well. The latest Labor Department figures are from November, and showed that in real terms, manufacturing wages were unchanged from October levels. Real private sector wages in November only inched up on month – by 0.09 percent. But they outperformed manufacturing.
>Year-on-year, November real wages were up by 1.61 percent for manufacturing, and by 1.83 percent for the private sector.
>And since the recovery began in mid-2009, real manufacturing wages are down 0.19 percent, whereas inflation-adjusted pay in the private sector is up 2.71 percent.