Manufacturing’s payrolls kept growing strongly in March and industry’s wages kept growing weakly. Despite lackluster (103,000) job growth figures last month for the economy as a whole, factory employment increased by a healthy 22,000 on month and by 232,000 year-on-year – the best annual improvement since May, 1998 (262,000).
Moreover, over the past year, manufacturing’s share of total American employment rose from 8.49 percent last March to 8.52 percent last month, showing that industry’s employment growth has been exceeding that of the economy as a whole.
In sharp contrast, pre-inflation manufacturing wages improved sequentially by just 0.19 percent versus 0.30 percent for the private sector in toto. Industry’s wage lag was even worse year-on-year – 1.67 percent versus 2.72 percent for the entire private sector. And in real terms, manufacturing is even further behind the private sector eight ball, with its constant dollar hourly pay down on net since January, 2016 – meaning that it’s been in technical recession for more than two years.
Here’s my analysis of the latest monthly (March) manufacturing figures contained in yesterday morning’s employment report from the Bureau of Labor Statistics:
>In March, domestic U.S. manufacturers continued strongly boosting payrolls while keeping wages in check.
>Industry gained 22,000 jobs on month in March, and revisions to comparably robust January and February numbers were only slightly negative.
>On an annual basis, manufacturing employment rose by 232,000 – the best such performance since May, 1998’s 262,000. Between the previous Marches, U.S. domestic manufacturers added only 52,000 jobs on net.
>Manufacturing job growth has been so robust that it’s now outpacing overall U.S. job growth. Last March, manufacturing jobs accounted for 8.49 percent of all American non-farm employment (the Bureau of Labor Statistics’ U.S. Employment universe). This March, their share stood at 8.52 percent.
>Manufacturing has now regained 51.41 percent (1.179 million) of the 2.293 million jobs it lost since the late-2007 onset of the Great Recession through the sector’s employment bottom in February and March, 2010.
>Yet despite apparently robust demand for manufacturing workers, manufacturing employers apparently feel little pressure to compete for them by offering better pay.
>In March, once again, in pre-inflation terms, manufacturing’s sequential wage growth trailed that of the overall private sector – by 0.19 percent to 0.30 percent. Revisions, moreover, were slightly negative.
>On an annual basis, manufacturing wages performed just as poorly. They were up in March by just 1.67 percent, versus 2.72 percent for the overall private sector. Between the previous Marches, manufacturing wages advanced by 2.52 percent.
>As a result, since the start of the current economic recovery, in mid-2009, pre-inflation private sector wages have grown by 26.74 percent faster than manufacturing wages. A year ago, the gap was only 21.39 percent.
>Adjusting wages for inflation, moreover, continues to make manufacturing’s recent wage record even bleaker.
>The latest data go through February, but that month, inflation-adjusted pay in industry fell sequentially by 0.19 percent – a downgrade from the -0.09 percent figure initially reported. Real private sector pay’s monthly February performance was revised down a flat line to a 0.09 percent dip.
>Year-on-year, real wages are up only 0.28 percent in the private sector in toto, but even that meager number is far better than manufacturing’s 0.65 percent drop.
>And worse still, although both the private sector and manufacturing are still suffering real wage recessions, the former’s began only last April – with after-inflation hourly pay down 0.09 percent since then. For manufacturing, such pay is down 0.28 percent since January, 2016.
>Further, since the current recovery’s mid-2009 onset, overall real private sector wages have risen more than twenty times faster (3.88 percent) than manufacturing wages (0.19 percent).
>Over the longer term, moreover, manufacturing remains a significant jobs laggard, too. Although nearly nine years into the current economic recovery, industry has finally regained more than half the jobs it lost during the recession and its aftermath, the overall private sector has more than doubled its recessionary job losses. Since shedding 8.780 million positions on net from December, 2007 through February, 2010, it has created 18.654 million.
>From another perspective, manufacturing payrolls remain 8.10 percent below their immediate pre-recession level of 13.746 million jobs. But overall private sector employment has risen 8.50 percent during that period.