According to this morning’s Labor Department jobs report, April was another month of impressive employment gains and sluggish wage growth in manufacturing. Industry added 24,000 net new jobs on month and revisions left recent months’ solid employment growth intact. Further, manufacturing payrolls’ yearly rate of expansion quickened in April (to 245,000) and was still the best such performance since May, 1998’s 262,000. In fact, manufacturing jobs continued their recent trend of increasing faster than overall employment, with their share of non-farm jobs growing from 8.49 percent last April to 8.53 percent.
Yet pre-inflation manufacturing wages advanced by only 0.15 percent on month in April and March’s figure was revised down slightly. Worse, on an annual basis, current dollar manufacturing hourly pay growth fell to 1.36 percent – the slowest such rate since June, 2015’s 1.25 percent. And in inflation-adjusted terms, manufacturing wages are still in technical recession, having fallen on net by 0.28 percent since February, 2016.
Here’s my analysis of the latest monthly (April) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>American manufacturing’s robust net job creation extended into April, yet swelling payrolls continued having little impact on the sector’s weak wage growth.
>Domestic manufacturers boosted payrolls by 24,000 in April. March’s 22,000 monthly jobs increase was left unrevised, and February’s previously reported 32,000 sequential improvement was downgraded to 31,000.
>Industry’s employment performance was even better on an annual basis. From April, 2017 to April, 2018, manufacturing added 245,000 net jobs – its best such performance since May, 1998’s 262,000.
>Between the previous Aprils, industry created 54,000 net new jobs.
>Further, manufacturing employment continued its recent trend of growing even faster than overall U.S. employment. Last April, manufacturing jobs accounted for 8.49 percent of all American non-farm employment (the Bureau of Labor Statistics’ U.S. employment universe). This April, their share stood at 8.53 percent.
>Manufacturing has now regained 52.42 percent (1.202 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.
>But not even their recent hiring spurt has induced domestic manufacturers to raise pay significantly.
>April saw pre-inflation hourly pay in manufacturing increase by just 0.15 percent. In a break with recent trends, this sequential manufacturing wage gain matched that for the private sector overall.
>But manufacturing’s March monthly wage increase was revised down from 0.19 percent to 0.15 percent, and the April private sector figure represents a slowdown from March’s 0.22 percent – which was also downgraded (from 0.30 percent).
>Manufacturing wages performed even worse on an annual basis. Between this April and last, they rose by just 1.36 percent – the slowest such improvement since June, 2015’s 1.25 percent. From April, 2016 to April, 2017, they increased by 1.93 percent.
>As a result, since the start of the current economic recovery, in mid-2009, pre-inflation private sector wages have grown by 25.62 percent more than their manufacturing counterparts. Last April, the gap was considerably less: 18.72 percent.
>In real terms, manufacturing’s recent growth has been even less impressive.
>The latest inflation-adjusted data go through March, when its constant dollar pay rose by 0.19 percent – a downgrade from the initially reported 0.28 percent. Real monthly wage growth for the private sector in toto was downgraded for March, too – but from 0.37 percent to 0.28 percent.
>Year-on-year, real wages in April for manufacturing are actually down – by 0.65 percent. For the private sector overall, they were up 0.28 percent.
>In fact, manufacturing workers have suffered a technical recession in real wages (two straight quarters or more of cumulative decline) since February, 2016. During that more-than-two-year period, their inflation-adjusted hourly pay is off by 0.28 percent.
>The overall private sector is in real wage recession, too, but only since last May. Since then, its after-inflation hourly pay is down by 0.09 percent.
>Further, since the current recovery’s mid-2009 onset, overall real private sector wages have risen nearly ten times faster (4.17 percent) than real manufacturing wages (0.47 percent).
>Despite healthy recent growth, manufacturing remains a longer-term jobs laggard. As reported above, since the current economic recovery began in mid-2009, manufacturing has regained more than half the jobs it lost during the recession and its aftermath. But since shedding 8.780 million positions on net from December, 2007 through February, 2010, the private sector has created 18.856 million net new positions.
>From another perspective, manufacturing payrolls remain 7.94 percent below their immediate pre-recession (December, 2007) level of 13.746 million jobs. But overall private sector employment has risen 9.50 percent during that period.