June’s 36,000 monthly manufacturing employment gain, the sector’s best sequential performance since December’s 39,000, helped industry produce its best annual job creation figure (285,000) since April, 1998 (288,000). Largely as a result, manufacturing employment as a share of total employment hit its highest level (8.54 percent) since July, 2016 (8.56 percent). That is, since that time, American manufacturing job creation has risen faster than overall U.S. job creation.
Pre-inflation manufacturing wages rose by 0.22 percent sequentially in June – unusually, beating the overall private sector’s performance (0.19 percent). But industry’s continuing wages woes were made clear again by the annual increase. Not only was it a meager 1.66 percent in constant dollars (well short of the overall private sector’s 2.74 percent advance). But this figure meant that manufacturing wage increases kept decelerating from the previous year’s rate (2.19 percent between June, 2016 and June, 2017).
The June inflation-adjusted wage figures won’t be released until next week, but as of May, manufacturing remained stuck in a real wage recession that began in January, 2016
Here’s my analysis of the latest monthly (June) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>Thanks to a June monthly employment improvement of 36,000 (the best such gain since December’s 39,000), U.S. manufacturing last month saw its payrolls rise by the biggest absolute number (285,000) in more than twenty years. The previous best annual job gain for industry came in April, 1998, when the total hit 288,000.
>June’s strong performance also helped lift manufacturing’s share of total non-farm employment (the Bureau of Labor Statistics’ U.S. jobs universe) to 8.54 percent – the highest level since July, 2016’s 8.56 percent.
>Manufacturing employment revisions were slightly positive, with May’s previously reported 18,000 sequential increase upgraded to 19,000, and April’s 25,000 now judged to be 28,000.
>Yet industry continued to be dogged by sluggish pre-inflation wage growth in June.
>The monthly increase of 0.22 percent actually exceeded that of the overall private sector (0.19 percent).
>Moreover, the previous months’ sequential wage performances were revised slightly upward, too – from a flat-line in May to a gain of 0.04 percent, and from a 0.15 percent sequential rise in April to 0.22 percent.
>On an annual basis, however, current dollar manufacturing wages improved by only 1.66 percent in June – well behind the private sector figure of 2.74 percent.
>Worse, the June figure represented yet another year of deceleration in manufacturing wage growth. Between the previous Junes, the sector’s hourly pay increased by 2.19 percent.
>By contrast, wage growth has been speeding up in the private sector, with the latest annual June increase besting the June, 2016-June, 2017 gain of 2.50 percent.
>And throughout the current economic recovery, even the mediocre-at-best increases in pre-inflation private sector wages have dwarfed those recorded for manufacturing – and the gap keeps widening.
>As of this June, since mid-2009, current dollar private sector wages had risen 26.43 percent faster than manufacturing wages. As of June, 2017, the difference was 21 percent.
>Further, in inflation-adjusted terms, hourly pay in manufacturing has been a much greater laggard.
>The latest official figures go through May, and they show that whereas real manufacturing wages fell by 0.19 percent on month, they inched up by 0.09 percent for the private sector.
>On an annual basis, as of May, inflation-adjusted manufacturing wages are down 1.10 percent. For the private sector, they’ve been flat.
>And although both manufacturing and all private sector workers have been experiencing technical real wage recessions (periods of cumulative shrinkage lasting at least two quarters), the private sector’s began only last June, and has seen constant dollar hourly pay dip by 0.09 percent.
>Manufacturing’s real wage recession began two-and-a-half years ago – in January, 2016. And since then, price-adjusted hourly pay if off by 0.19 percent.
>And during the current recovery, real private sector wages have risen more than 15 times faster (4.27 percent) than real manufacturing wages (0.28 percent).
>Nonetheless, despite its strong recent performance, manufacturing remains a longer-term significant job-creation laggard, too. Since its latest employment bottom, in February and March, 2010, it’s regained 1.26 million (54.95 percent) of the 2.293 million jobs lost during the recession and its immediate aftermath.
>The overall private sector lost 8.780 million jobs from the year-end 2007 onset of the recession through February, 2010. Since then, it’s created 19.291 million net new jobs.
>In fact, since the last recession’s onset, the private sector has boosted its employment by 9.08 percent. But manufacturing payrolls are still down 7.51 percent from their December, 2007 levels.