In September, American domestic manufacturing employment and wages continued to move in dramatically different directions. Sequential net new job creation fell for a second straight month (by 13,000). Coupled with generally negative revisions, the results prolonged a jobs recession that began in November, 2014 – the sector’s worst such stretch since the Great Recession. As a result, manufacturing jobs as a share of the national total fell to 8.47 percent – a new record low. Industry’s pre-inflation wage gains, however, continued their recent pattern of exceeding the overall private sector’s, rising 0.31 percent month-on-month and 2.95 percent year-on-year.
Here’s my analysis of the latest monthly (September) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>American domestic manufacturing in September continued its recent pattern of losing jobs but strongly increasing wages. A monthly employment drop of 13,000 helped extend the sector’s worst jobs recession since the Great Recession – a slump that began in November, 2014. Employment is down on net by 10,000 during this period.
>Due to September’s fall-off and mainly negative revisions, manufacturing’s share of total U.S. non-farm employment fell to yet another all-time low – 8.47 percent.
>Yet manufacturing’s month-on-month and year-on-year wage increases in September continued to best those of the private sector. The former rose by 0.31 percent, versus 0.23 percent for the private sector as a whole, and the respective annual totals were 2.95 percent and 2.59 percent.
>August’s 14,000 sequential manufacturing job loss was revised down to 16,000. July’s downwardly revised gain of 6,000 was downgraded again, to 2,000. And June’s downgraded 8,000 employment advance remained the same.
>Manufacturing’s wage gains, however, generally saw positive revisions. August’s 0.04 percent monthly improvement was upgraded to 0.19 percent. July’s 0.19 percent rise is now pegged at 0.23 percent. And June’s 0.19 percent decrease remained the same.
>The new year-on-year manufacturing employment changes revealed significant job-creation weakness as well. September’s decline of 47,000 was the biggest since August, 2010 (73,000), when the sector was still recovering from the worst of the Great Recession.
>Between the previous Septembers, manufacturing added 92,000 net new jobs.
>Since its 2010 employment bottom, manufacturing has regained 809,000 (35.28 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 15.309 million.
>In fact, whereas total private sector employment is now 5.63 percent higher than at the recession’s beginning, manufacturing employment is still 10.80 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 16.49 percent to 13.64 percent.
>Examining manufacturing’s inflation-adjusted wages reveals a more complicated picture. The latest Labor Department figures are from August, and show that manufacturing’s month-on-month performance (real wages were flat) slightly beat that of the private sector (down 0.09 percent).
>Year-on-year, manufacturing’s real wage increase also topped that of the private sector (by 1.50 percent to 1.32 percent).
>Yet 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 – by 3.88 percent.