American domestic manufacturing employment rose for the second straight month in July (by 9,000 net new jobs). But the improvement still left industry in its longest jobs slump since the Great Recession, as employment remained down on net since January, 2015. In addition, manufacturing’s share of total U.S. employment fell to its latest record low – 8.52 percent. Manufacturing wages were a much brighter spot, with July bringing the fourth straight yearly increase of more than three percent – the best such run since late 2009, when the current recovery was beginning.
Here’s my analysis of the latest monthly (July) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>American domestic manufacturing employment rose for the second straight month in July, with its 9,000 sequential jobs gain following a June improvement that was revised up from 14,000 to 15,000.
>Yet this advance was still too small to lift industry out of an employment recession that stretched into its 18th month – the longest such period since the Great Recession. Manufacturing employment is down a cumulative 6,000 since January, 2015.
>The new data also pushed manufacturing employment as a share of total non-farm employment down to 8.52 percent – its latest record low.
>The manufacturing wages picture, however, contrasted strikingly with the tepid employment situation. July’s 3.01 percent yearly gain in pre-inflation hourly pay was manufacturing’s fourth straight month of three-plus percent annual increases. That’s industry’s best such stretch since the early months of the current economic recovery, back in late 2009.
>May’s monthly manufacturing employment change was downgraded from a downwardly revised 16,000 to a 17,000.
>Manufacturing’s year-on-year jobs performance remained poor, remaining in the red in July (by 31,000) for the fifth straight month. That’s the worst such stretch since 2010, when manufacturing was still mired in a multi-decade span of employment decline.
>Between the previous Julys, manufacturing added 147,000 net new jobs.
>Since its 2010 employment bottom, manufacturing has regained 852,000 (37.16 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 15.015 million.
>In fact, whereas total private sector employment is now 5.37 percent higher than at the recession’s beginning, manufacturing employment is still 10.48 percent lower.
>Manufacturing’s July year-on-year pre-inflation wage gains also continued their recent trend of thumping those of the private sector overall – by the aforementioned 3.01 percent versus the latter’s 2.64 percent.
>The sector’s sequential wage performance in July was more subdued, with current dollar hourly pay increasing by 0.12 percent versus 0.31 percent for the private sector overall.
>But current dollar manufacturing wage revisions were healthily positive. June’s 0.23 percent sequential drop was revised to a 0.19 percent decrease. May’s upgraded 0.20 percent increase was boosted to 0.46 percent, and April’s downwardly revised 0.31 percent advance was upgraded to 0.62 percent.
>Since the recovery’ June, 2009 onset, however, manufacturing’s pre-inflation wage gains still trail those of the private sector as a whole by 16.03 percent to 12.95 percent.
>Examining manufacturing’s inflation-adjusted wages reveals a more complicated picture. The latest Labor Department figures are from June and show again that manufacturing’s performance was weaker (falling 0.46 percent on month) than that of the private sector overall (where real wages also decreased, but only by 0.19 percent sequentially).
>Year-on-year, June real manufacturing’s wage performance beat the private sector’s – increasing by 2.37 percent versus 1.52 percent.
>Yet since the recovery began in mid-2009 – nearly seven years ago – inflation-adjusted manufacturing wages have risen only 0.93 percent. Real private sector wages are up considerably more – by 3.49 percent.