The major U.S. manufacturing jobs trends ended 2017 intact. Employment rose month-to-month in December by a solid 25,000 and the year-on-year gain of 196,000 was the best since the matching total of February, 2015. Moreover, at 8.51 percent, manufacturing’s share of total non-farm jobs kept inching up, and hit its best level since September, 2016 (which was fractionally higher).
Pre-inflation manufacturing wages rose by 0.11 percent on month in December after a 0.15 percent November decrease, but the yearly improvement of 1.56 percent was less than half that between the previous Decembers (3.21 percent). Moreover, progress in both measures lagged the private sector, and since the current recovery began, private sector paychecks have now outgrown those in manufacturing by 25.50 percent in current dollars – a gap considerably wider than last December’s 20.58 percent.
The technical recession in automotive job creation extended into its twentieth month in December, with employment levels down by 2,400 since April, 2016. But the December monthly employment increase of 1,300 was its second straight monthly gain.
Here’s my analysis of the latest monthly (December) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>December’s non-farm payrolls report showed that both major trends recently shaping the U.S. Manufacturing employment scene remained fully intact as 2017 closed.
>Solid monthly job gains increased, with employment rising by 25,000. And the October sequential gains of 23,000 and 31,000, respectively, remained unrevised.
>Moreover, December’s yearly 196,000 manufacturing jobs increase was the best annual total since the same performance in February, 2015.
>Between the previous Decembers, industry’s payrolls fell by 16,000.
>In fact, manufacturing employment has been growing faster than overall non-farm employment (the Bureau of Labor Statistics’ U.S. jobs universe) since September, 2016, as in December, its 8.51 percent share of total non-farm employment was the highest since that month’s fractionally better share.
>Manufacturing wages, however, are still presenting a contrasting picture. They did rise month-to-month by 0.l1 percent before adjusting for inflation following a 0.15 percent November drop. But as often the case this year, this advance trailed the overall private sector’s 0.34 percent.
>On an annual basis, manufacturing’s 1.56 percent current dollar wage increase lagged both the overall private sector’s 2.50 percent, and the 3.21 percent gain industry recorded between the previous Decembers.
>Consequently, since the current economic recovery began in mid-2009, private sector wages before inflation have risen 25.50 percent faster than manufacturing wages. As of last December,, the gap was 20.58 percent.
>The December increase drove the number of net new manufacturing jobs created since the sector’s February and March, 2010 lows to 1.086 million – or 47.36 percent of the 2.293 million net job nosedive manufacturing suffered from the late-2007 start of the recession through that aforementioned employment bottom.
>But the overall private sector’s longer-term jobs performance has been much better. Since its February, 2010 jobs bottom, employers in this sector have boosted their payrolls by a net 17.782 million – more than twice the 8.780 million net positions lost during the recession and its aftermath.
>In addition, manufacturing employment remains 8.78 percent (or 1.207 million jobs) lower than when that recession began at the end of 2007.
>During the same period, private sector employment is up has grown by 7.76 percent (or 9.002 million jobs).
>Another problem with manufacturing employment continues to be a medium-term slowdown in the automotive sector. Indeed, the vehicle and parts industry has now been stuck in a technical jobs recession (a two quarter of more period of cumulative net decline) that entered its twentieth month in December.
>Although last month’s automotive employment rose sequentially in December for the second straight months (by 1,300), it’s down by 2,400 since April, 2016.
>Even more sobering than the pre-inflation manufacturing wage data are the price-adjusted figures – which have been in technical recession (down by 0.09 percent) since March, 2016.
>The latest numbers are from November, but they fell on month by 0.55 percent, and year-on-year were down 0.37 percent. From November, 2015 to November, 2016, real manufacturing wages rose by 1.21 percent.
>The private sector’s performance has been better, but by no means good. These inflation-adjusted wages are in technical recession, too, having fallen by a cumulative 0.28 percent since May.
>In November, they decreased by 0.28 percent on month and were only 0.19 percent higher than in the previous November.
>From November, 2015 to November, 2016, real private sector wages increased by 0.94 percent .
>As a result, during the current recovery – which is now more than eight years old – real private sector wages are up by 3.98 percent. Slow as that rate of increase is, it’s nearly six times faster than the 0.65 percent increase in after-inflation manufacturing wages.