Manufacturing fell back into a technical jobs recession in February, as the sector’s 16,000 month-to-month jobs decrease combined with negative revisions to produce cumulative employment loss for the sector since July – seven months ago. The sequential job loss – the first since last August – also created another new all-time low (8.59 percent) for manufacturing employment as a share of total non-farm jobs.
In addition, February’s year-on-year manufacturing jobs gain (12,000) was its worst such performance since September, 2010 registered a decline. In pre-inflation terms, manufacturing wages fell sequentially for the second time in three months, and the sector’s year-on-year wage advance was the lowest (2.24 percent) since August.
Here’s my analysis of the latest monthly (February) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>Manufacturing’s on-and-off recent employment recession resumed in February, with the sector’s 16,000 month-to-month net jobs decrease plus negative revisions pushed its employment levels below those of last July – seven months ago. Since a two-straight-quarter decline in economic activity is widely seen as an indicator of recession, manufacturing’s seven-month cumulative employment decline arguably qualifies as a slump.
>The February sequential job loss was manufacturing’s first since August’s 18,000 drop and, along with the negative revisions, pushed industry’s share of total non-farm employment (the Labor Department’s U.S. employment universe) to a new record low of 8.59 percent.
>The new data revised January’s strong 29,000 manufacturing job improvement to 23,000, and December’s 13,000 increase to 6,000. November’s 3,000 advance remained unchanged.
>The poor February numbers also resulted in manufacturing generating its worst year-on-year job increase (12,000) since September, 2010 – when the sector’s employment fell by 28,000 compared with the previous September. They also contrasted strikingly with manufacturing employment’s 200,000 yearly gain between February, 2014 and February, 2015.
>Since manufacturing hit its 2010 employment bottom, the sector has regained 874,000 (38.12 percent) of the 2.293 million jobs it lost during the recession and its aftermath. By contrast, the private sector overall lost 8.78 million jobs from the recession’s December, 2007 onset through its February, 2010 absolute employment low. Since then, it has increased net employment by 14.26 million.
>In fact, whereas total private sector employment is now 4.72 percent higher than at the recession’s beginning, manufacturing employment is still 10.32 percent lower.
>The new jobs report also revealed that a seven-month string of monthly pre-inflation manufacturing wage gains ended in February. Hourly pay fell by 0.08 percent from January levels. This drop, however, was smaller than the 0.12 percent current-dollar monthly wage decrease seen in the private sector overall last month.
>Manufacturing wage revisions were mixed, with January’s previously reported strong 0.31 percent monthly gain revised up to 0.35 percent, but December’s 0.04 percent rise downgraded to a 0.04 percent dip.
>Manufacturing’s yearly February wage rise of 2.24 percent was its smallest year-on-year improvement since August’s 2.09 percent. It was much stronger than the 1.25 percent annual increase between the previous two Februarys, but weaker than February, 2013-February, 2014’s 2.36 percent advance.
>Manufacturing’s latest annual wage hike also topped that of the overall private sector (2.22 percent) but the latter won out the previous February (1.93 percent). The private sector’s 2.31 percent wage advance between February, 2013 and February, 2014 was slightly lower than manufacturing’s.
>Longer term, manufacturing remains a clear wage laggard. Since the current economic recovery began, in mid-2009, its pre-inflation wages are up less (11.12 percent) than overall private sector wages (14.50 percent).
>Manufacturing’s wages have under-performed after adjusting for inflation as well. The latest Labor Department figures are from January, and showed that in real terms, manufacturing wages were up sequentially by 0.28 percent – well off the overall private sector pace of 0.47 percent.
>Year-on-year, manufacturing’s 1.13 percent inflation-adjusted wage increase slightly trailed the private sector’s 1.14 percent.
>And since the recovery began in mid-2009, real manufacturing wages are up only 0.28 percent, whereas inflation-adjusted pay in the private sector is up 3.39 percent.