January’s preliminary U.S. manufacturing jobs figures showed that former President Obama fell short of his stated goal of creating one million new positions in industry by 638,000. Since Mr. Obama’s first inauguration, moreover, manufacturing employment fell by 1.75 percent (220,000). But since the June, 2009 start of the current economic recovery, it rose by 5.24 percent (615,000). Since the sector’s February and March jobs bottoms, manufacturing employment has improved by 7.75 percent (888,000).
These new data, which incorporate benchmark revisions extending back to last March, also reveal that manufacturing’s latest jobs recession has continued, with employment down on net by 11,000 over the last 18 months. January’s modest 5,000 net sequential manufacturing jobs gain was more than offset by negative revisions back to October. January pre-inflation manufacturing wages increased on month but at a much slower rate (0.08 percent) than in December (0.46 percent). Since the current recovery began more than seven years ago, however, they’re up by only 14.51 percent – less than the overall private sector’s 17.43 percent.
The latest revisions also resulted in a new all-time low in January for manufacturing’s share of total non-farm employment – just under 8.48 percent. In addition, manufacturing’s annual 46,000 jobs loss in January was the biggest such drop since August, 2010 (73,000).
Here’s my analysis of the latest monthly (January) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>Providing the first full tally of former President Obama’s manufacturing job creation record, this morning’s Labor Department employment figures showed that the previous administration saw industry’s employment rebound healthily from an historic recession, but that one of its key manufacturing employment objectives proved a major disappointment.
>Since Mr. Obama’s first inauguration, in January, 2009, manufacturing employment has fallen by 1.75 percent (220,000 jobs) on net.
>But the severe manufacturing output and jobs slump that began more than a year before the first Obama term began continued for months. Since the current overall economic recovery began, in June, 2009, manufacturing employment is up by 5.24 percent (615,000 jobs). And since domestic manufacturing hit its recent employment bottom – which didn’t come until February and March, 2010 – its payrolls have expanded by 7.75 percent (888,000).
>Nonetheless, President Obama fell far short of a goal he set during his 2012 reelection campaign – spurring the creation of an additional million net new domestic manufacturing jobs. Since his second, January, 2013 inauguration, U.S. industry added only 362,000 positions.
>In fact, the new employment figures show that manufacturing currently remains in a new jobs recession that began in July, 2015. Since then, manufacturing employment has dropped by 11,000 on net.
>Manufacturing’s efforts to regain jobs traction weren’t helped by the last three months’ performance. The sector did add 5,000 jobs sequentially in January. But December’s initially reported 17,000 monthly employment gain was revised down to an 11,000 increase. And October’s 4,000 monthly gain is now judged to be a 5,000 loss. Only partly offsetting these setbacks was the upgrade of November’s improvement from a 7,000 sequential job drop to no change.
>Although pre-inflation manufacturing wages advanced sequentially in January for the second straight month, the latest increase (0.08 percent) was much slower than in December (0.46 percent – wich in turn was downwardly revised from the initially reported 0.50 percent).
>The January monthly manufacturing wage hike lagged that of the private sector overall (0.12 percent) – reversing the December situation.
>Year-on-year, manufacturing wages rose by 2.93 percent in current dollars in January – considerably faster than the 2.37 percent gain recorded for the private sector as a whole. The latest annual manufacturing pre-inflation wage increase also bested the sector’s 2.52 percent advance between the previous two Januarys.
>But since the recovery’s mid-2009 onset, current-dollar manufacturing wages have risen by only 14.51 percent – significantly slower than the 17.43 percent increase for the overall private sector.
>Moreover, in real terms, however, the story for manufacturing is even more mixed.
>The latest Labor Department figures are from December, and show that manufacturing’s month-on-month performance (real wages rose by 0.18 percent) topped that of the overall private sector (where they flatlined).
>Year-on-year, though the new December 1.12 percent inflation-adjusted manufacturing wage improvement trailed that recorded from December, 2014 to December, 2015 (1.80 percent). The comparable overall private sector figures were not greatly different (0.75 percent and 1.82 percent respectively).
>But since the recovery began in mid-2009, manufacturing has remained a major real wage laggard, as inflation-adjusted hourly pay has risen a mere 1.12 percent – less than a third as fast as the 3.69 percent achieved in the private sector in general.
>The new benchmark revisions and the latest monthly figures resulted in a new all-time low (8.48 percent) for manufacturing’s share of total non-farm employment (the Labor Department’s U.S. employment universe).
>Year-on-year, manufacturing lost 46,000 net jobs in January. That’s the worst such performance since August, 2010 (a 73,000 falloff). Between the previous Januarys, manufacturing gained 88,000 net new jobs.
>Since its 2010 employment bottom, manufacturing has regained 888,000 (38.73 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 16.021 million.
>In fact, whereas total private sector employment is now 6.24 percent higher than at the recession’s beginning, in late 2007, manufacturing employment is still 10.22 percent lower.