American domestic manufacturing employment fell sequentially in August for the first time since May, and the 14,000 drop, along with lower June and July gains, prolonged industry’s longest jobs recession since the Great Recession. Manufacturing payrolls have fallen by 13,000 cumulatively since December, 2014, and its share of total non-farm employment plunged to its latest record low – 8.49 percent. Wages increased month-to-month for the seventh month in the last eight. Year-on-year increases remained strong but August’s 2.48 percent increase was the smallest since February.
Here’s my analysis of the latest monthly (August) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>American domestic manufacturing employment saw its two-month winning streak snapped in August as the sector lost 14,000 jobs compared with July levels. This decline combined with downward revisions to extend a manufacturing jobs recession that has lasted since December, 2014.
>Over that twenty-month stretch, American manufacturing payrolls have declined by a cumulative 13,000.
>July’s 9,000 initially monthly employment gain, meanwhile, was revised down to a still preliminary 6,000, and June’s upwardly revised 15,000 improvement was nearly cut in half – to 8,000.
>The new data also pushed manufacturing employment as a share of total non-farm employment down to 8.49 percent – its latest record low.
>By contrast, wages remained a manufacturing bright spot. They rose by 0.04 percent in pre-inflation terms sequentially in August, the seventh such improvement in the last eight.
> Revisions were slightly positive. July’s 0.12 percent advance was upgraded to 0.19 percent. June’s1 Aug is 0.04 July is now 0.19 (from 0.12) June’s upwardly revised 0.19 decrease and May’s upwardly revised 0.46 gain both remained the same.
>Although manufacturing’s August monthly pre-inflation pay increase trailed the private sector’s (0.12 percent), manufacturing recorded a higher year-on-year wage increase: 2.48 percent versus the private sector’s 2.32 percent. At the same time, that annual manufacturing increase was industry’s lowest since March, and the second weakest figure for the calendar year.
>Another key indicator of poor manufacturing employment performance – the year-on-year changes – remained weak as well. The August annual decline of 37,000 was the sixth straight, and extended a string that has been the sector’s worst since 2010.
>Between the previous Augusts, manufacturing added 113,000 net new jobs.
>Since its 2010 employment bottom, manufacturing has regained 828,000 (36.11 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 15.128 million.
>In fact, whereas total private sector employment is now 5.47 percent higher than at the recession’s beginning, manufacturing employment is still 10.66 percent lower.
>Despite strong relative recent performance, since the recovery’ June, 2009 onset, 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 July, and show that manufacturing’s month-on-month performance (rising 0.28 percent) trailed that of the private sector (0.37 percent).
>Year-on-year, however, July’s real manufacturing’s wage performance (up 2.17 percent) beat the private sector’s (1.80 percent).
>And since the recovery began in mid-2009 – nearly seven years ago – inflation-adjusted manufacturing wages have risen only 1.21 percent. Real private sector wages have increased considerably faster – though not fast (by 3.98 percent).