U.S. manufacturing in November continued its recent pattern of good employment gains but weak wage performance. November payrolls bested October’s by 31,000, and the year-on-year jobs gain of 189,000 was the best since April, 2015’s 194,000. September and October revisions boosted manufacturing employment by a net of 2,000. Manufacturing’s share of overall employment, moreover, grew to 8.50 percent. As recently as July, it had once again hit an all-time low of 8.47 percent. Yet in the automotive sector, which led domestic manufacturing’s bounce-back from a deep recessionary plunge, a jobs recession hit its first anniversary, with employment down 400 on net since last November.
On the wage front, manufacturing remained a laggard, as pre-inflation hourly pay in November fell sequentially by 0.15 percent versus a private sector gain of 0.19 percent. Manufacturing’s performance year-on-year was no better, as its current dollar wage gain of 1.87 percent trailed the private sector figure of 2.47 percent. As a result, the gap between pre-inflation private wage advances and manufacturing wage advances during the current recovery widened year-on-year from 22.52 percent to 24.27 percent.
Here’s my analysis of the latest monthly (November) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>November was far from the cruelest month for U.S. domestic manufacturing employment, which rose sequentially by a healthy 31,000, and improved year-on-year by 189,000 – the best annual gain since April, 2015’s 194,000.
>From November, 2015 to November, 2016, manufacturing lost 21,000 jobs on net.
>Moreover, September’s manufacturing employment advance was revised up again, from 6,000 to 9,000 – offsetting by 2,000 the downgrade for the October increase from 24,000 to 23,000.
>These improvements brought manufacturing’s share of non-farm employment (the Bureau of Labor Statistics’ U.S. jobs universe) up from 8.49 percent to 8.50 percent.
>One conspicuous exception in November to the brightening manufacturing jobs picture was the automotive sector – whose powerful bounce-back led domestic industry’s rapid initial recovery from its deep recessionary downturn.
>Despite a 1,700 monthly rise in net new jobs, weak revisions left automotive’s payrolls 400 fewer than last November, a one-year stretch that technically qualifies as a recession (more than two quarters of cumulative negative growth).
>Manufacturing wages continued to disappoint in November, though. The 0.15 sequential decline in hourly pay before inflation contrasted with the 0.19 percent rise in the private sector overall.
>Year-on-year, pre-inflation manufacturing wages advanced by 1.87 percent – not only slower than the private sector’s 2.47 percent performance, but well behind industry’s 2.86 percent rise between the previous Novembers.
>The November wage results mean that, since the current economic recovery began in mid-2009, private sector wages before inflation have risen 24.27 percent faster than manufacturing wages. Last November, the gap was 22.52 percent.
>The solid November gains pushed the number of net new manufacturing jobs created since the sector’s February and March, 2010 lows to 1.061 million. This total represents 46.27 percent of the 2.293 million net job nosedive manufacturing suffered from the late-2007 start of the recession through that aforementioned employment bottom.
>At the same time, manufacturing remains a significant employment laggard, too. Since its February, 2010 jobs bottom, the private sector overall has boosted its payrolls by a net 17.643 million. That’s more than twice the 8.78 million net positions lost during the recession and its aftermath.
>Further, manufacturing employment is still 8.96 percent (or 1.232 million jobs) lower than when that recession began at the end of 2007.
>During the same period, private sector employment has grown by 7.64 percent (or 8.863 million jobs).
>The latest inflation-adjusted wage data for manufacturing and overall private sector wages go through October, and also reveal special, chronic problems with manufacturing pay.
>Real manufacturing wages increased by 0.09 percent on month in October – a slight upgrade from the originally reported flat-line. The latest year-on-year figure remained at a 0.46 percent decline and the latest October, 2015-October, 2016 figure remained at a 1.87 percent gain.
>For the private sector as a whole, the October monthly real wage performance has been downgraded, from a 0.09 percent dip to a 0.29 percent decrease. The year-on-year results have worsened, too – wages are now judged to have risen only by 0.19 percent, rather than 0.73 percent, and the improvement between the previous Octobers has been downgraded from 1.13 percent to 0.75 percent.
>Yet these data are still better on the whole than those for manufacturing.
>In addition, during the current recovery – which is now more than eight years old – real private sector wages are up by 4.17 percent. Their manufacturing counterparts have risen by only 1.21 percent.