Tags

, , , , , , ,

American domestic manufacturing employment rose by 14,000 sequentially in June, its best monthly performance since January’s 18,000 Gain. But industry remained mired in an employment recession that entered its 17th month, and its share of total U.S. non-farm jobs hit its latest record low – 8.53 percent. Yet year-on-year manufacturing wages before inflation increased faster than at any time (3.43 percent) since September, 2009 (3.91 percent), early in the current economic recovery. At the same time, constant dollar manufacturing pay declined on month for the first time since December.

Here’s my analysis of the latest monthly (June) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:

>American domestic manufacturing in June posted its best monthly jobs gain (14,000) since January (18,000), but the improvement was too small to boost the sector out of an employment recession that’s now entered its 17th month.

>U.S. domestic manufacturing employment is still down on net – by 15,000 – since January, 2015, as it remained in its longest hiring slump since the last economy-wide recession.

>Further, manufacturing hit another all-time low as a share of total non-farm employment – 8.53 percent. At the sector’s absolute employment bottom, in February and March, 2010, this figure stood at 8.83 percent and 8.82 percent, respectively.

>More positively, manufacturing’s pre-inflation year-on-year wage growth in June – 3.43 percent – was its best annual advance since September, 2009’s 3.91 percent.

>Manufacturing jobs revisions were mildly negative, with May’s initially reported 10,000 loss now judged to be a 16,000 reduction, and April’s downwardly revised 2,000 job growth now pegged at a 5,000 improvement.

>Year-on-year, manufacturing lost 29,000 jobs in June – better than May’s downwardly revised 42,000 (the worst since 2010’s 73,000) but much worse than the 154,000 job increase achieved between the previous two Junes.

>Manufacturing jobs remain down on an annual basis for four straight months – also the worst such stretch since 2010.

>Since that 2010 employment bottom, manufacturing has regained 843,000 (36.76 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 a 14.799 million.

>In fact, whereas total private sector employment is now 5.19 percent higher than at the recession’s beginning, manufacturing employment is still 10.55 percent lower.

>On top of registering their best gain in nearly seven years, year-on-year manufacturing wages also rose faster than private sector wages overall – 2.60 percent.

>During the recession and early in the recovery, when manufacturing wages last surged on a annual basis, anecdotal evidence suggested that manufacturing companies were reducing payrolls by laying off their least experienced, and lowest paid workers – thus resulting in impressive looking wage increases.

>Yet subsequently, manufacturers have taken on significantly more supervisory and managerial workers than production workers, rendering the recent disparity between the sector’s employment and pay trends more puzzling.

>On month, constant dollar manufacturing wages actually fell in June – by 0.23 percent – while overall private sector wages inched up by 0.08 percent. That monthly decline was manufacturing’s first since December.

>May’s initially reported sequential manufacturing wage gain of 0.20 percent was upgraded to 0.24 percent, but April’s 0.66 percent improvement was reduced significantly, to 0.31 percent.

>Since the recovery’ June, 2009 onset, moreover, manufacturing’s pre-inflation wage gains trail those of the private sector as a whole by 15.67 percent to 11.33 percent.

>Examining manufacturing’s inflation-adjusted wages reveals a different picture. The latest Labor Department figures are from May and show again that manufacturing’s performance was stronger (rising 0.09 percent on month) than that of the private sector overall (where real wages were flat). Both figures, though, clearly were paltry.

>Year-on-year, May real manufacturing wages were up by 2.24 percent – also faster than the overall private sector’s 1.42 percent.

>Yet since the recovery began in mid-2009 – nearly seven years ago – inflation-adjusted manufacturing wages have risen only 2.24 percent. Real private sector wages have increased considerably faster – by 3.69 percent.

Advertisements