In December, American domestic manufacturing employment enjoyed its best monthly increase (17,000) since January (18,000). But these gains were not enough to pull the sector out of its latest jobs recession, as employment is down on net by 24,000 since December, 2014. Just as disturbing, the sector in 2016 suffered its first full calendar-year of job loss (45,000) since recession-plagued 2009 (1.375 million).
Manufacturing’s pre-inflation wage gains rebounded in December (by 0.50 percent) from November’s 0.45 percent monthly decline, and also outpaced the private sector year-on-year – by 3.37 percent to 2.93 percent. But in both current-dollar and price-adjusted terms, industry remains a laggard during the current economic recovery. Manufacturing employment as a share of total non-farm employment also remained at its latest all-time low – just under 8.45 percent.
Here’s my analysis of the latest monthly (December) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>American domestic manufacturing gained 17,000 jobs on a monthly basis in December – its best such performance since January’s 18,000 improvement. But the gains weren’t big enough to end the sector’s two-year long jobs recession.
>Since December, 2014, U.S. manufacturing employment is down on net by 24,000 – its longest slump since the Great Recession.
>Moreover, the December data (which are still preliminary) show that in 2016, American manufacturing lost 45,000 jobs on net. That’s its first full calendar-year of net employment decline since 2009 — when the sector’s payrolls cratered by 1.375 million even as the recession was coming to an end.
> In 2015, manufacturing gained 26,000 jobs.
>Better news came on the wage front. Pre-inflation hourly pay in manufacturing rose by 0.50 percent on month – better than the 0.39 percent improvement for the private sector as a whole.
>Manufacturing wage increases also topped those in the private sector on an annual basis – by a 3.37 percent to 2.93 percent margin.
>In real terms, however, the story for manufacturing is much more mixed.
>The latest Labor Department figures are from November, and show that manufacturing’s month-on-month performance (real wages fell by 0.64 percent) was much worse than the private sector’s (down 0.28 percent).
>Year-on-year, however, manufacturing’s real wage increase in November (1.12 percent) beat the overall private sector’s (0.85 percent).
>Nevertheless, since the recovery began in mid-2009 – more than seven years ago – inflation-adjusted manufacturing wages have risen only 1.03 percent. Real private sector wages have increased considerably faster – by 3.69 percent.
>In pre-inflation terms, moreover, manufacturing wage gains also trail those of the private sector during the recovery – 14.55 percent to 17.43 percent.
>The net new jobs created in December still left manufacturing’s share of non-farm American jobs (the Labor Department’s definition of the U.S. employment universe) at just under 8.45 percent. That’s virtually the same proportion as in November, and another record low.
>The latest revisions to the manufacturing jobs figures netted out to zero. November’ originally reported 4,000 job loss was revised to a (still preliminary) 7,000 decrease. But October’s 5,000 decrease is now judged to have been just 4,000 in the final (for now) tally, and September’s 8,000 employment decline was upgraded to 6,000.
>Since its 2010 employment bottom, manufacturing has regained 822,000 (35.85 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 15.823 million.
>In fact, whereas total private sector employment is now 6.07 percent higher than at the recession’s beginning, manufacturing employment is still 10.70 percent lower.