(What’s Left of) Our Economy: U.S. Manufacturing Output Surprises to the Upside Again

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Remember one of the signature expressions of 1960s sitcom character Gomer Pyle – “Surprise, surprise, surprise!”? That was my reaction to this morning’s Federal Reserve release on U.S. manufacturing production for February, which reported a second straight increase.

The February improvement was pretty marginal to be sure – 0.12 percent in after-inflation terms (the kind of numbers that will be presented here unless otherwise specified). And since its production is down on net since last February, domestic industry is still in recession. But any official gain in the hard data is noteworthy, given the lousy February sentiment-based survey results put out by many of the Federal Reserve’s regional branches (e.g., here), which have continued into March (e.g., here), and by leading private sector groups (e.g., here).

Also unexpected: January’s increase was revised up from one of 0.94 percent to one of 1.35 percent. That’s the best such performance since October, 2021’s 1.70 percent. So maybe that January figure wasn’t a one-off, as I speculated last month?

That’s not clear yet. Both the January and February advances also might still stem from a baseline effect – specifically, catch-up from an absolutely terrible December. That month’s manufacturing output decline has now been revised down a second time. Its 2.06 percent sequential dropoff is the worst such result since the 3.64 percent nose-dive in weather-affected February, 2021. But as that journalistic cliché goes, “It’s too soon to tell.”

Here’s what we do know – so far (keeping in mind that revisions of all statistics going back to 2021 will be issued on March 28).

The February report means that U.S.-based manufacturing output is now up since since just before the CCP Virus pandemic arrived stateside in force in February, 2020 by 1.65 percent – the same figure calculable from last month’s Fed release.

Only seven of the 20 broadest manufacturing sub-sectors tracked by the Fed boosted their production in February. The biggest winners were:

>the very big chemicals industry, which expanded output by 1.24 percent. Better yet, this growth came after a January increase of 3.11 percent (the best such performance since April, 2021’s 3.97 percent). The January pop looks like catch-up from December’s 2.63 slump (the worst such performance since weather-affected February, 2021’s 6.69 percent cratering). But the February follow-on could be a sign of truly regained strength.

Since immediately pre-pandemic-y February, 2020, chemicals production is up 7.52 percent, versus the 6.11 percent calculable last month;

>computer and electronic products, where production advanced for the first time since last September – and by 1.22 percent. But now it’s contracted by 0.62 percent during the CCP Virus era, versus having grown by 2.95 percent as of last month’s release; and

>wood products, whose output rose for the second straight month after having slumped for most of the past year. Not so coincidentally, this losing streak paralleled the housing industry woes prompted by the Federal Reserve’s historically rapid interest rate hikes. The February 1.11 percent gain was the best since the 2.81 percent surge last February.

But the wood products industry is still 2.49 percent smaller than it was just before the pandemic’s arrival in force, versus the 2.56 percent calculable last month.

The biggest February maufacturing output losers were:

>textiles and products, which saw production sag by 2.11 percent, the biggest decrease since last June’s 3.44 percent. The fall-off depressed output in this small sector to 12.96 percent below its February, 2020 level, versus the 8.93 percent calculable last month;

>plastics and rubber products, whose production decrease of 1.82 percent was its seventh straight monthly loss, and dragged its output losses down to 5.62 percent below its immediate pre-pandemic levels versus the 4.33 percent calculable last month; and

>miscellaneous non-durable goods, where output slipped by 1.52 percent, and pushed production down to 14.95 below its pre-pandemic level versus the 13.76 percent calculable last month.

Output also drooped in two sectors of continuing special importance to all of industry and the entire economy.

The story of CCP Virus era U.S.-based manufacturing has been in many respects a story of the automotive sector, and in February, vehicle and parts production dipped by 0.28 percent. This advance helped it draw to within 0.12 percent of its size in February, 2020, from the 1.61 percent shortfall calculable last month.

The diverse machinery industry, meanwhile, is crucial both to the rest of manufacturing and to the entire economy because its products are used so widely for retooling and modernization. So its growth indicates general manufacturing and overall business optimism, and vice versa.

Ordinarily, therefore, a moderately 0.40 percent monthly decline in machinery output would be moderately bearish, but the sector has been too volatile lately to be certain. The February decline followed a 3.42 percent burst that was the strongest since 5.12 percent pop of January, 2021. That’s a sign of a catch-up effect.

But the January results followed a 2.59 percent tumble in December that was the worst since last May’s 3.34 percent. All told, however, machinery output is now 5.54 percent greater than just before the pandemic struck, versus the 4.77 percent calculable last month.

Manufacturing sectors of special importance since the pandemic struck also suffered generally lousy Februarys performances.

The semiconductor shortages that have caused so many headaches for U.S. and foreign manufacturers seem to be easing, but supplies remain inadequate for many customers. And the situation won’t be helped by the 1.65 percent real output decrease U.S.-based chip production suffered in February.

Worse, this decrease was the sector’s eighth in a row – and some of these estimates have been revised down substantially. Due to these poor and worsening results, whereas as of last month’s Fed release, U.S. semiconductor output was 4.47 percent above its immediate pre-CCPVirus levels; now it’s 7.83 percent below.

Medical equipment and supplies, which contains the healthcare products used so widely to combat the pandemic, suffered a 0.73 percent real output contraction – its fifth straight monthly decrease.

Medical equipment and supplies output in February dropped for the fifth time in the last six months. But even with this latest 0.51 percent retreat, production in this sector – which includes so many of the products used to fight the CCP Virus – is now 10.52 percent higher than jut before the pandemic hit, versus the 9.85 percent calculable last month.

Production in pharmaceuticals and medicines was off by 0.54 percent in February, but the decrease was the first since last July, and depressed this big sector’s growth since immediately prepandemic-y February, 2020 to 20.42 percent versus the 21.44 percent calculable last month.

The exceptions to this pattern were aircraft and aircraft parts-makers – possibly because industry giant Boeing’s fortunes seem to be looking up finally. Their output increased by 0.35 percent in February, and is now up 30.19 percent since the advent of a pandemic that long hammered travel of all kinds, versus the 35.81 percent calculable last month.

What lies ahead? The entrails remain difficult to read, especially since the new banking crisis is creating doubt as to whether the Federal Reserve will continue an inflation-fighting effort it’s been making vigorously but that still hasn’t produced the economy slowdown it’s seeking – but that may at some point because these monetary tightening moves typically don’t start working for many months. See what I mean? 

If the central bank remains on course, domestic manufacturing’s troubles seem certain to return. But as long as the economy keeps defiantly expanding, its power may bring U.S.-based industry securely back into growth mode.

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(What’s Left of) Our Economy: U.S. Manufacturing’s Employment Win Streak Comes to an End

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A payrolls loss even as the rest of the American economy continued to create gobs of jobs – that was the big manufacturing takeaway from this morning’s official release on U.S. employment for February.

Although job creation for the non-farm economy (the federal government’s definition of the U.S. employment universe) came in at a robust 311,000, domestic industry shed headcount (by 4,000) for the first time since April, 2021.

Moreover, the modest manufacturing job increase of January, which contrasted so strikingly with the blowout performance recorded by non-farm businesses overall, was revised down – from an initially reported 19,000 to 13,000. The initially reported January total U.S. jobs gain of 517,000 was reduced this morning as well. But unlike the manufacturing results, the new figure (504,000) is still astronomical.

The new February numbers pushed U.S.-based manufacturing deeper into CCP Virus-era employment laggard status. Since February, 2020 (just before the pandemic arrived in force in the United States), domestic industry has boosted headcount by 1.55 percent. the private sector overall by 2.59 percent, and the non-farm sector (which includes public sector workers at all levels of government) by 1.96 percent.

As of last month’s release, manufacturing jobs were up 1.67 percent since February, 2020, private sector jobs up 2.46 percent, and non-farm jobs up 1.77 percent.

Consequently, manufacturing’s share of non-farm jobs has sunk from the 8.38 percent calculable as of last month’s report to 8.36 percent, and from its immediate pre-pandemic level of 8.39 percent.

And its share of private sector jobs is down from the 9.80 percent calculable last month to 9.77 percent, and from its immediate pre-pandemic level of 9.87 percent.

February’s biggest manufacturing jobs winners were:

>computer and electronics products, which added 2,800 workers on month fo its best such performance since last October’s 3,300. In addition, January’s initially reported 700 employment drop is judged to be an increase of 100.

These companies’ workforces are now 2.08 percent higher than in immediately pre-pandemic-y February, 2020, versus the 1.77 percent increase calculable last month;

>chemicals, whose payrolls expanded by 2,500 in a resumption of a multi-year string of healthy monthly gains. Indeed, this sequential advance followed an upwardly revised loss of 1,400 jobs that was the sector’s worst such performance since the 2,200 decline in May, 2021.

Chemicals employment is now 7.40 percent greater than it was just before the pandemic struck versus the 6.80 percent growth calculable as of last month;

>beverage, tobacco and leather products (a new name for miscellaneous non-durable goods), which hired 1,900 workers in February. January’s initially reported rise of 5,000 (which had been its best such performance since last June’s 6,300 surge) has now been downgraded to one of 3,100, but remained strong nonetheless.

Job levels in this sector, therefore, are still up by an impressive 10.42 percent since February, 2020 – down just slightly from the 10.45 percent calculable last month; and

>non-metallic mineral products, which boosted payrolls by 1,500, but whose excellent first-reported January results (4,200 – thought to be the best since last February’s 5,600 pop) have also been downwardly revised (to 1,700).

Companies in this sector have now boosted their workforces by 3.74 percent since the virus’ arrival state-side in force, versus the 4.02 percent calculable last month.

February’s biggest manufacturing jobs losers were:

>plastics and rubber products, where employment fell by 4,700 to resume a weak employment stretch that began last October. January’s gain, meanwhile, was revised from 1,200 to 1,100.

Employment in these industries is now 2.99 higher than in February, 2020 – above the overall manufacturing figure but down from the 3.52 percent calculable last month;

>furniture and related products, which also continued a recent losing streak by cutting 2,800 positions. At least January’s initially reported decrease of 700 has been upgraded to one of 500. Headcounts in these sectors are now off by 3.60 percent since the CCP Virus began roiling the U.S. economy in February, 2020, versus the 2.71 percent calculable last month;

>textile mills, a very small sector whose 1,700 jobs retreat was its worst such perfomance since the identical decrease in July, 2020 – as the economy had begun recovering from the effects of the CCP Virus’ first wave. Further, January’s initially reported 900 jobs gain was revised down to one of 700.

These results left textile mill employment 10.88 percent lower than in February, 2020 versus the 8.91 percent calculable last month; and

>apparel, another very small industry, which cut employment by 1,300. This loss, moreover, comes on top of a January drop of 1,900 that was initially reported as one of 2,100. The apparel workforce is now 11.32 percent smaller than just before the pandemic’s arrival in force, versus the 9.02 percent calculable last month.

RealityChek has also been tracking employment in two industries of special importance to manufacturing and the economy overall, and both eaked out tiny hiring increases in February.

Machinery data have been an emphasis because its products are used to equip and modernize nearly all manufacturing and non-manufacturing sectors. So changes in its workforce can signal optimism or pessimism about their prospects.

This big, varied sector extended its monthly job creation winning streak to nine in February, but by a bare 400. January’s results remained in the black, too, but were revised down from an increase of 2,000 to one of 1,000. Payrolls in machinery have now grown by 1.10 percent since just before the pandemic era began, in February, 2020, versus the 1.13 percent calculable last month.

Automotive’s February headcount gain was even smaller – just 200. Nor was it much of a rebound from January’s contraction, which was revised up from one of 6,500 loss to one of 5,100. But the automotive workforce is now 5.91 percent larger than in February, 2020, versus the 5.70 percent calculable last month.

Monitored by RealityChek as well have been several narrower sectors that have attracted special attention during the CCP Virus era, but where the data are always a month behind those of the above broader sectors, Their employment performances were overall positive but with one exception modestly so.

The shortages plaguing the semiconductor industry have bled over into much of the rest of the economy in recent years, which largely explains why Washington has now decided to spend tens of billions of dollars over the next decade to support more domestic production.

Jobs in the category called “semiconductors and related devices” inched up by 300 in January, but – continuing a pattern described above elsewhere in manufacturing – December’s initially reported increase of 800 is now judged to have been just 400. The workforce in this grouping has now grown by 10.79 percent since just before the pandemic struck in full force – a figure that’s better than it looks since these companies’ cut relatively few jobs during the short but deep virus-induced downturn of spring, 2020.

Aircaft manufacturing was pummeled by a combination of pandemic-era travel curbs and Boeing’s production woes, but employment lately has staged a strong comeback. January’s net new hires numbered 400 and December’s initially reported jump of 1,100 has been upgraded to one of 1,500.

Job levels in the sector have now closed to within 3.45 percent of their immediate pre-pandemic numbers, versus having been down 5.56 percent as of last month’s jobs report.

Aircraft engines and engine parts-makers added just 100 new employees in January, but December’s increase of 800 – the best such performance since July’s 900 – remained unrevised. Their payrolls are now just 7.97 percent lower than their immediate pre-pandemic total versus the 8.08 percent shortfall calculable last month.

Non-engine aircraft parts producers reduced their workforces by 100 in January, but December’s hiring increase was revised from 100 to 200. So their headcounts are still off by 16.44 percent during the pandemic period – the same figure calculable last month.

Surgical appliances- and supplies-makers have been in the spotlight since the virus’ arrival in force, since this grouping contains so many of the products used to fight the pandemic. They increased their workforces by 100 in January, but December’s initially reported loss of 400 is now judged to have been one of 500.

As with non-engine aircraft parts their employment level since February, 2020 stayed the same as calculable in December, but in the case of surgical appliances and supplies, the change has been positive – by 1.14 percent.

The big pharmaceuticals and medicines sector was a notable exception to this employment pattern of marginal change, as its companies’ boosted employment by 1,800. But these gains followed December cuts that were upgraded from an initially reported 1,100 to 2,000 – the sector’s worst such performance since the 2,900 nosedive last July.

Yet upward revisions in previous months enabled the gain in the pharmaceuticals and medicines employment to rise since February, 2020 from the 14.25 percent calculable last month to 14.54 percent.

The news was much worse in the pharmaceutical sub-sector that contains vaccines. Employment tumbled in January for the second straight month (by 100) and December’s initially reported plunge of 1,200 is now pegged as one of 1,300.

These drops depressed this grouping’s employment expansion since immediately pre-pandemic-y February, 2020 – but only from the 20.10 percent calculable last month to a still sterling 19.90 percent.

With the U.S. economy lately growing more vigorously than widely predicted, it’s certainly possible that its surprising strength will bring an end to manufacturing’s ongoing production recession and its recent weak hiring.  And the federal government has certainly been trying to lend a helping hand via the aforementioned semiconductor subsidies, along with an infrastructure bill, and  green subsidies – both of which contain Buy American requirements. 

But it’s also possible that the last few months’ worth of data are telling us that the fortunes of manufacturing and the rest of the domestic economy are being decoupled.  Indeed, industry’s still towering trade deficit is one indication, making clear that the consumption of manufactures remains much greater than their production. 

Compounding the uncertainty:  February’s manufacturing jobs loss could be washed away via revisions in next month’s jobs report.  But at the least, this first employment drop in nearly two years might signal that domestic manufacturers are no longer hoarding workers as zealously as other sectors of the economy have been.  If so, expect manufacturing employment to continue stagnating.         

(What’s Left of) Our Economy: Amid a U.S.-Wide Hiring Burst, Manufacturing Job Creation Trudges Along

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Although today’s official new U.S. jobs report (for January) showed a completely unexpected burst of monthly employment creation for the economy as a whole, domestic manufacturing shared only modestly in this sequential boom. Moreover, some long-term revisions released along with the new numbers show that U.S.-based industry remains in a hiring slowdown, though one less severe than previously reported.

Between December and January, domestic manufacturers increased payrolls by 19,000 – the best such result since October’s 37,000. December’s initially reported gain of 8,000 has been upgraded to one of 12,000, and November’s identical original estimate of an 8,000 monthly rise now stands at 14,000.

In addition, according to the revisions, for full-year 2022, manufacturing expanded its headcounts by 396,000 (3.15 percent) versus the 379,000 (3.02 percent) recorded last month.

Consequently, domestic industry’s employment advance still decelerated during the second half of last year, the slowdown was less than initially reported. As of last month’s jobs report, its average monthly job creation downshifted from 39,830 between January and June to 23,330 between July and December. Yet the revisions judge that the first half average was 39,170 and that the second half average was 26,830.

January’s biggest manufacturing jobs winners among the broadest sub-sectors tracked by the U.S. Labor Department were:

>food manufacturing, where hiring hit 6,900. Head counts in this very big industry moved 4.33 percent higher than in immediately pre-pandemic-y February, 2020, versus the 3.79 percent calculable in last month’s pre-revisions data (the figure that will be used for comparison unless otherwise specified);

>beverage, tobacco, and leather and allied product manufacturing (a new name for miscellaneous non-durable goods), which added 5,000 employees on net for its best such performance since last June’s 6,300 pop. Headcounts here are now 10.45 percent above their February, 2020 level, versus the 9.75 percent rise calculable last month;

>non-metallic minerals, whose workforce grew by 4,200 in its best monthly advance since last February’s 5,600. Jobs are now up 4.02 percent since just before the CCP Virus’ arrival stateside in force, versus the 0.14 percent increase calculable as of last month; and

>fabricated metal product, whose companies added 3,100 employees. Even so, employment in this very big sector sank to 0.91 percent less than in February, 2020, versus the 0.73 percent shortfall calculable last month.

The biggest January job losers among the broadest manufacturing sub-sectors were:

>transportation equipment, a big, diverse group of industries whose 8,400 sequential jobs decline followed a six-month tear that featured a surge of 15,000 in December. Still, the latest result was the worst since last May’s 8,700 plunge. Employment in the transportation equipment cluster has climbed by 2.57 percent since that last full data month before the pandemic’s arrival, versus the two percent figure calculable last month;

>chemicals, another large, diverse category that lost 3,500 workers on month in January. This second straight big drop, however, followed a strong run that began back in late 2021, and employment has now improved by 6.80 percent since February, 2020, versus the 6.44 percent rise calculable last month; and

>computer and electronics product manufacturing shed 700 positions in its weakest monthly perfomance sinc September’s 1,300 drop. But its payrolls moved up to 1.77 percent higher during the pandemic period and its emerging aftermath, versus the 1.39percent increase calculable last month.

RealityChek also tracks employment in two industries of special importance to manufacturing and the economy overall, and their January employment experiences differed dramatically.

Machinery matters greatly because its products are used extensively in nearly all manufacturing and non-manufacturing sectors, and changes in its workforce can signal optimism or pessimism about their prospects.

So the 2,000 monthly increase in machinery workers in January seems to augur well for continued expansion. Moreover, this gain pushed the sector’s employment levels back above where they were just before the pandemic began roiling and distorting the nation’s economy and society – by 1.13 percent. As of last month, they were still 0.24 percent less than in February, 2020.

Yet the automotive industry, whose fortunes have greatly affected domestic industry’s aggregate performance for most of the pandemic period, saw head counts tumble by 6,500 in its worst such performance since last February’s 23,900 plunge. Despite the setback, however, the motor vehicle and parts workforce is now 5.70 percent bigger than just before the pandemic’s arrival, versus the 5.46 percent calculable last month.

RealityChek also tracks a number of narrower sectors that have attracted special attention during the CCP Virus era, but where the data are always a month behind those of the above broader sectors,and their Decembers were substantially mixed jobs-wise, too. Comparisons with pre-revisions November data aren’t possible in these cases, though, because those figures aren’t publicly available.

The shortage-plagued semiconductor and electronic components industries boosted its payrolls by 800, bringing their employment levels 5.56 percent above their totals in immediately pre-pandemic-y February, 2020.

The aircraft manufacturers that were so hard hit both by pandemic-era travel curbs and Boeing’s production woes, continued a recent employment rebound by adding 1,100 more workers in December. But they still employ 5.56 percent fewer than just before the virus’ arrival.

Not surprisingly, aircraft engines and engine parts-makers hired another 800 employees that month for their best such performance since July’s 900. Their headcounts are now off just 8.08 percent since February, 2020.

Non-engine aircraft parts producers’ payrolls increased by 100, but are still down 16.44 percent since the pandemic era began.

The story was very different, however, in many of America’s key healthcare manufacturing sectors, as all three followed here reported December job cuts.

In the surgical appliances and supplies industries that turn out so many of the products used to fight the CCP Virus, employment fell by 400 – their worst such performance since last June’s 600 decline. Their headcounts are now just 1.14 percent bigger than in February, 2020

The big pharmaceuticals and medicines sectors shrank their workforces by 1,100 – the most since July’s 2,900 falloff. But employment here is still up 14.25 percent since that last full pre-pandemic data month of February, 2020.

The pharmaceutical sub-sector that contains vaccines let 1,200 employees go in December in its worst such performance since back in December, 2018 when they also laid off 1,200. But since February, 2020, their payrolls have still risen by 20.10 percent.

Optimists can legitimately observe that U.S.-based manufacturing’s meh employment increases lately have been pretty impressive given that the sector has been in a recession (albeit a mild one) for just over a year. But since the pandemic’s peak in the spring of 2020, it’s benefited pretty consistently from a strongly recovering broader economy. It’s anything but clear if domestic industry can keep up even that sluggish pace if the Federal Reserve’s anti-inflation policies do start slowing growth, much less trigger a recession.    

(What’s Left of) Our Economy: Manufacturing Job Creation Downshifts Further

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No doubt about it now – at least for now. As yesterday’s official U.S. employment data (for December) confirm, domestic manufacturing is experiencing a pronounced job-creation slowdown.

Of course, these latest figures, as well as November’s, are still preliminary. But it would take mammoth revisions to change this narrative. U.S.-based manufacturers upped their payrolls by only 8,000 on month in December. On top of the same (downwardly revised) November employee increase, those last two data months have each seen industry’s weakest job gains since the 28,000 loss suffered in April, 2021. And the new October and November figures are downgrades, too.

Another perspective: During the first half of this year, manufacturing employment rose by an average of 39,830. So far, during the second half of the year, this monthly average is down to 23,330.

Moreover, the unimpressive recent results have placed the private sector overall ahead of manufacturing as an employment generator during the post-CCP Virus period. Since February, 2020 – the last full data month before the pandemic began hammering and roiling the economy – the former’s head counts are up 1.29 percent versus 1.17 percent for manufacturing. Last month, manufacturing held the lead by 1.17 percent to 1.16 percent. (Government payrolls at all levels are still down by 1.91 percent during this stretch.

Consequently, manufacturing’s share of total U.S. private sector jobs slipped for the second straight month – from 9.86 percent to 9.85 percent. But industry’s strong two years of hiring mean that this percentage is still higher than the immediate pre-CCP Virus level of 9.83 percent. And the December results still left the manufacturing workforce at its highest level (12.934 million) since November, 2008’s 13.034 million.

Nonetheless, the December jobs report was by no means devoid of bright spots, as the rundown that follows will show that several major industries created gobs of jobs during the month.

December’s biggest manufacturing jobs winners among the broadest sub-sectors tracked by the U.S. Labor Department were:

>transportation equipment, a big, diverse grouping boosted employment by 15,200 in December – its best such performance since August’s 20,900. Revisions were mixed, with November’s initially reported 6,100 advance downgraded to one of 4,500; October’s initially reported 4,700 increased revised way up to 13,200, and then again to 14,500; and September’s original 8,400 increase downgraded to 4,700 but then revised up to settle at 6,300.

Employment in transportation equipment is now 1.94 percent higher than in the last full pre-CCP Virus data month of February, 2020, versus the 1.08 percent calculable last month;

>non-metallic mineral products, where payrolls improved by 4,500 in December in the best monthly performance since December, 2020’s 5,200. Revisions were mixed here, too. November’s initially reported 1,800 gain is now recorded as a loss of 800; October’s results have gone from an increase of 3,200 to one of 2,900 and back to 3,000; and September’s initially reported 1,500 job loss was revised up to a dip of just 200 before settling at a decrease of 300.

The non-metallic mineral products workforce has now expanded by 0.57 percent since immediately pre-pandemic-y February, 2020, versus the 0.01 percent calculable last month.

>machinery, a bellwether for the entire economy, since its products are so widely used in both manufacturing and non-manufacturing sectors, enjoyed job growth of 3,300 in December. Revisions were positive overall. November’s advance of 3,900 was revised up to one of 4,200 – its best monthly increase since April’s 5,800. October’s initially reported 3,000 increase was upgraded to 3,600 but then revised back down to the original 3,000. But September’s initially reported 1,700 decrease (then the sector’s worst such total since November, 2021’s 7,000 plunge) was upgraded to a decline of just 300, where it finally settled.

This performance moved machinery’s head count to within 0.28 percent of its February, 2020 level, versus the 0.55 gap percent calculable last month;

>food manufacturing, another big industry, which saw employment rise by 3,300 in December. Revisions were overall positive. November’s initially reported 3,400 increase is now judged to have been 4,200. October’s initially reported 1,000 rise was downgraded to 500, but then revised back up to 900. And although September’s initially reported 7,800 job growth was ultimately revised down to 7,600, it was still the sector’s best such performance since February’s 11,100.

The food manufacturing workforce has now expanded by 3.80 percent since just before the pandemic’s arrival in force, versus the 3.52 percent calculable last month; and`

>fabricated metal products, another sizable sector, upped employment by 2,900 in December, and revisions were mixed. November’s net new hires were revised down from 1,300 to 500. October’s results were at first downgraded from a 5,200 increase to one of 5,000, but then revised up to 6,600 (the strongest such number since April’s identical increase. But September’s initially reported advance of 6,300 has been downgraded significantly, to 5,500 and then finally to 2,300.

Job levels in fabricated metal products is now off by 0.93 percent since February, 2020, versus a 1.18 percent shortfall calculable last month.

The biggest December jobs losers among the broadest manufacturing categories were:

>chemicals, a big category whose 5,700 employment contraction in December was its first drop since August, 2021 and by far the worst since the 20,000 nosedive of April, 2020, when the devastating effects of the CCP Virus’ first wave were peaking. Revisions, moreover, were negative on net. November’s initially reported 4,700 head count climb (then chemicals’ best result since May’s 5,100 improvement) to 3,600. After having been upgraded from 1,600 to 2,200, October’s rise was revised down to 1,700. But September’s initially reported 3,400 increase was downgraded to one of 2,700 before being upgraded again to its final level of 3,200.

The chemicals workforce is now 6.47 percent greater than in immediately pre-pandemic-y February, 2020 – down from the 7.32 percent increase calculable last month;

>petroleum and coal products, a sector whose payrolls weakened by 3,300 in December – its worst such performance since the 3,500 jobs lost in winter weather-affected January, 2021. Revisions were mixed, though. November’s initially reported 900 jobs added now stands at 1,100 (the best such increase since February’s 2,000). October’s results bounced up from an initially reported employment dip of 100 to a gain of 200 and back to a 100 loss. And September’s initially reported head count advance of 300 has stayed upgaded to 400 for three months.

But the December fall-off dragged petroleum and coal products employment down to 8.31 percent below its level just before the pandemic’s arrival in force, versus the 5.31 percent gap calculable last month;

>furniture and related products, whose 2,900 employment decrease was its worst since the 73,900 catastrophe suffered in April, 2020 – during the height of the pandemic’s first wave. Revisions, moreover, were significantly negative – no surprise given the recent woes of the nation’s housing sector. November’s initially reported slump of 1,500 is now estimated at 1,900. October’s results have deteriorated from a slip of 200 to one of 400. And September’s initially reported 300 decrease now stands at one of 600.

These employment setbacks have pushed the furniture industry’s workforce down to 2.31 percent below its February, 2020 levels, versus the 1.33 percent calculable last month; and

>miscellaneous nondurable goods, which also reduced its payrolls by 2,900 in December, and whose revisions were negative on net. November’s initially reported jobs gain of 1,200 is now pegged as a retreat of 3,300 – these companies’ worst such performance since they cut 9,400 positions in December, 2020. After October’s gain of 2,100 was upgraded to one of 3,300, it was lowered to 2,700 – which at least was still the best such performance since June’s 5,400. But September’s results have been revised up from 1,300 net new hires to 2,000 and have settled at 2,300.

This diverse group of industries’ have now enlarged their workforce by 9,68 percent since immediately pre-pandemic-y February, 2020, versus the 12.13 percent calculable last month.

As known by RealityChek regulars, throughout the CCP Virus period, the automotive industry’s employment gyrations have influenced manufacturing’s overall hiring, and in December, as with other sectors examined above, its robust job creation helped keep industry’s monthly total in the black.

Indeed, U.S.-based vehicle and parts makers added 7,400 workers on month, and revisions were positive. November’s initially reported increase of 1,900 was revised up to 2,300 – though this result was still these industries’ weakest since they shed 7,400 employees in May. But October’s initially reported rise of 4,800 has been upgraded twice – to 7,500 and then to 9,000. And September’s results have been revised from 8,300 to 7,400 and then bsck up to 9,000 – where they’ve remained.

All told, automotive’s jobs numbers are now 5.11 percent higher than in February, 2020, versus the 4.17 percent calculable last month.

RealityChek has also been following several other industries of specical interest during the pandemic era whose results are always a month behind those of the above categories. And on the whole, they expanded job creation modestly in November.

In the semiconductor sector, whose shortages have handicapped so many other industries, and which will now benefit from massive government subdidies aimed at reviving domestic production, head counts rose by 1,200, and revisions were mixed. October’s initially reported increase of 2,300 was downgraded to one of 2,200 – a total that was still the best since June, 2020’s 3,000, during the recovery from the first CCP Virus wave. But September’s figures remained donwardly revised from an initially reported gain of 800 to a loss of 1,000.

The semiconductor workforce is now 6.60 percent larger than in immediately pre-pandemic-y February, 2020, versus the 6.01 percent calculable last month.

Aerospace manufacturers were especially hard hit by the CCP Virus-era travel bans and by individuals’ reluctance to fly. But with normalization returning, these companies’ revived hiring continued on balance in November.

Aircraft makers enlarged their workforce by 300 – a performance that was actually their weakest since they cut 800 positions in January. Revisions were slightly negative, however, with October’s initially reported 3,900 revised down to 3,800 – still the sector’s best such performance since June, 2021’s 4,400 jump. And September’s initially reported advance of 1,300 stayed at a downwardly revised 1,200.

As a result, aircraft employment crept to within 5.77 percent of its immediate pre-pandemic level, versus the 5.85 percent calculable last month.

In aircraft engines- and engine parts-makers, payrolls grew by 500, and revisions were positive. October’s initially reported improvement of 700 was upgraded to one of 800, and September’s 100 job loss has remained unrevised. Employment in these industries has now contracted by 7.42 percent since February, 2020, versus the 8.83 percent calculable last month.

The exceptions to this pattern of stronger November hiring were the non-engine aircraft parts- and equipment sectors. They cut payrolls by 400 in November, and revisions were slightly negative. October’s initially reported gain of 100 was revised down to no change, and Smbeepter’s contraction stayed at 700 after having been downgraded from a loss of 500. These results left employment among these companies off by 14.45 percent during the CCP Virus era, versus the 14.36 percent calculable last month.

The healthcare manufacturers that have occupied the spotlight since the pandemic began generally added jobs in November, too. But the surgical appliances and supplies makers that turn out so many of the products used to fight the CCP Virus weren’t among them.

These companies shrank their workfoce by 800 in November in their weakest performance since identical cuts in June, and revisions were negative on balance. October’s initially reported hiring flatline was revised up to an increase of 600 – their best employment month since they added 900 positions in August. But September’s results have been downgraded to a decline of 300 after having been revised up from an advance of 1,000 to one of 1,200.

These ups and downs left this sector’s workforce just 4.83 percent larger than in immediately pre-pandemic-y February, 2020 –much lower than the 11.64 percent growth calculable last month.

By contrast, the big pharmaceuticals and medicines category boosted employment by 2,200 in November – its best such performance since June’s 4,000. Revisions were positive, too. October’s initially reported increase of 600 (which I erroneously reported last month as a flatline) was downgraded to 500, but September’s advances have been revised up from 200 to 500 to 1,200.

During the CCP Virus era, this sector has upped employment by 12.51 percent, versus the 11.64 percent calculable last month.

Finally, the medicines subsector containing vaccines hired 700 net new workers in November, but revisions were mixed. October’s initially reported gain of 600 was upgraded to one of 900 – the best improvement since the identical addition in June. But September’s results have been revised down from a rise of 500 to one of 300 after having been initially reported as a 200 increase.

Still, employment in this vaccines-centric grouping is now 27.31 percent higher than just before the pandemic hit the United States in force, versus the 26.29 percent calculable last month.

The substantial hiring increases in major industries like automotive and fabricated metals products make it difficult to forecast a significant downturn in manufacturing job creation during the next few months. And the strong job creation in machinery is especially encouraging, since it seems to indicate that companies throughout industry and the rest of the economy are ordering its products in anticipation of continued solid demand from their customers.

At the same time, the chemicals sector also provides inputs for many other industries, and its December job cuts could presage, at a minimum, a softening of activity in manufacturing and beyond. And since it began acknowledging inflation’s seriousness, the Federal Reserve seems as determined as ever to achieve such softening in order bring prices under control.

Right now, the safest bet seems to be that manufacturing job creation stays subdued, and even loses more momentum.

(What’s Left of) Our Economy: U.S. Manufacturing Job Growth is Down, but Don’t Count it Out

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As shown by the new (for November) official U.S. employment report, domestic manufacturing’s job creation has been so strong since the CCP Virus arrived state-side in force that even one lagging month didn’t change its recent status as a national hiring leader.

That said, Friday’s report on what are called non-farm payrolls (NFP – the U.S. government’s definition of the American jobs universe) also revealed that, as with the entire economy, manufacturing job creation has downshifted in recent months. Whether it will stall out or worse going forward, however, remains a very open question.

Domestic industry upped payrolls by 14,000 sequentially in November – its weakest performance since shedding 28,000 positions in April, 2021. Revisions were positive, but just mildly, with October’s initially reported gain of 32,000 now pegged at 36,000, and September’s increase remaining at a slightly upwardly revised 23,000.

These results are less impressive than those from the first half of this year, when manufacturers boosted employment by a monthly average of nearly 40,000, and three months saw gains of more than 50,000. Yet since February, 2020 – the last full data month before the virus began spreading rapidly and roiling the economy – industry’s employees have increased by 1.17 percent. That’s better than the gain for the private sector overall (1.16 percent) and for the non-farm economy (0.68 percent).

Manufacturing’s share of all private sector jobs and all non-farm jobs did dip in November – from 9.87 percent of the former to 9.86 percent, and from 8.43 percent to 8.42 percent for the latter. But both shares are still higher than in February, 2020 – which were 9.83 percent and 8.38 percent, respectively.

In addition, the November manufacturing employment advance kept its head count at the highest level (12.934 million) since November, 2008’s 13.034 million.

November’s biggest manufacturing jobs winners among the broadest sub-sectors tracked by the U.S. Labor Department were:

>transportation equipment, a big diverse sector that added 6,100 workers. And revisions were nothing less than spectacular. October’s initially reported advance of 4,700 is now estimated as a surge of 13,200. September’s result is now judged as a 6,300 jump after having been revised down from an initially reported 8,400 increase to one of 4,700. And August’s initially reported 2,400 jump was jaw-droppingly upgraded to one of 10,500 and then to a 20,900 burst, which is the final figure for now. This rocket ride has pushed transportation equipment employment to 1.08 percent above the levels of immediately pre-pandemic-y February, 2020 versus the 0.14% calculable last month;

>chemicals, another big, diverse sector which raised employment by 4,700 – its best monthly result since May’s 5,100. Revisions, however, were mixed. October’s initially reported 1,600 increase was revised up to one of 2,200. September’s initially reported rise of 3,400 was downgraded to one of 2,700 but then revised back up to a 3,200 increase. But August’s initially reported gain of 3,500, which was revised up to 3,900, was then downgraded to a final total of 2,700. Still, chemicals payrolls have now climbed by 7.32 percent since the pandemic’s arrival in force, versus the 6.64 percent calculable last month;

>machinery, whose 3,900 net new employees were especially encouraging bothnew because this hiring was the strongest since April’s 5,800, and because this industry’s products are used so widely througout the rest of manufacturing and the entire economy. Even better, revisions were considerably positive. October’s initially reported improvement of 3,000 was upgraded to one of 3,600. September’s initially reported 1,700 decrease (which had been the worst since last November’s 7,000) was revised up to a decline of 300 and then estimated as the same. And after being revised down from 2,800 to 2,200, August’s increase was revised back up to the now final figure of 2,800. Whereas machinery employment was off by 0.90 percent from February, 2020 levels as of last month, it’s now within 0.55 percent; and

>food manufacturing, another big sector, and one that hired 3,400 net new workers. Revisions were mixed here, too. October’s initially reported increase of 1,000 was cut in half, to 500. But September’s initially reported 7,800 pop (the best such performance since February’s 11,100) went unrevised and then was downgraded to a still impressive 7,600. And although August’s initially reported 2,400-job loss was first revised up to one of 1,000, it was then downgraded to a decrease of 2,700, which is where it’s stayed. Food manufacturing’s workforce has now grown by 3.52 percent since the pandemic began hammering the economy, versus the 3.36 percent calculable last month.

The biggest November jobs losers among the broadest manufacturing categories were:

>plastics and rubber products, whose 3,200 employment drop was its biggest since the 4,400 plunge in September, 2021 – and where revisions were negative, except for one that was in the “jaw-dropping” category, too. October’s initially reported increase of 3,000 was revised down to 700. September’s initially reported loss of 1,400 was upgraded to a gain of 600 before being revised way down to a decrease of 2,400. And after being revised down from an advance of 900 to one of 100, August’s job creation estimate soared to 4,400, where it remained Friday morning. But the post-February, 2020 increase in plastics and rubber products jobs fell from the 4.94 percent calculable last month to 3.76 percent;

>electrical equipment and appliances, whose 2,400 monthly employment decrease was the worst since May, 2020’s 6,100. Revisions, moreover, were significantly negative. October’s initially reported net new hiring of 300 is now judged to be a decline of 1,300. September’s initially reported rise of 3,000 has been downgraded twice – to one of 1,300 and then to 1,100. And August’s gains, which were first upgraded from 800 to 1,700, were then revised down to their final figure of 1,200. As a result of these setbacks, the payrolls of electrical equipment- and appliance-makers are now just 2.72 percent higher than in immediately pre-pandemic-y February, 2020, versus the 3.77 percent calculable last month;

.>paper and paper products, whose companies shed 2,000 jobs, their worst performance since the 2,800 drop in April, 2021. Revisions overall were negative. October’s initially reported increase of 900 was revised up to 1,300 (the best such performance since this past April’s 2,100). September’s initially reported rise of 100 was upgraded significantly to 1,200 before being downgraded to an advance of 700. And August’s initially reported loss of 700 was revised up to one of 500 but then downgraded to a 1,000 decline. Employment in this sector is now 1.10 percent lower than in February, 2020 versus the -0.52 percent calculable last month; and

>primary metals, where head counts weakened by 1,700 for the worst such result since the 9,200 nosedive in May, 2020 – as the Virus pandemic was just off its peak. Yet revisions were positive on net. October’s initially reported drop of 200 is now judged to have been a gain of 900. September initially reported decrease was upgraded even more – to an increase of 2,700 – before being revised back down to one of 2,300. And August’s initially reported improvement of 1,400 was downgraded to one of 600 before being upgraded to 900, where it remained today. Primary metals employment is now 3.95 percent lower than just before the pandemic’s arrival in force, versus the 3.68 percent calculable last month.

One industry followed closely by RealityChek throughout the CCP Virus period registered healthy solid employment gains in November. Job numbers in the automotive sector climbed by 1,900, and revisions were dramatically positive. October’s initially reported increase of 4,800 is now judged to have been 7,500. September’s initially reported growth of 8,300 was first downgraded to 7,400 but then revised up to 9,000. And August’s initially reported drop of 1,900 to a jump of 4,000 and then way up to a burst of 12,000 – its final figure for now and the best such result since March’s 18,400. This hiring wave left automotive sector head counts 4.17 percent higher than in immediately pre-CCP Virus February, 2020, versus the 3.54 percent calculable last month.

As known by RealityChek regulars, data for several other industries of special interest since the pandemic era began are always a month behind the figures for these broader categories, and these October results were generally good.

The shortage-plagued semiconductor industry added 2,300 jobs in October, possibly representing an early sign of the major Made in America incentives contained in the recently passed CHIPS and Science Act. The increase was the best since June, 2020’s 3,000, but revisions were only mixed. September’s initially reported advance of 800 is now judged to be a drop-off of 1,000, but August’s initially reported 1,200 increase was revised up to its now final figure of 1,500. Semiconductor industry employment is now 6.01 percent higher than in February, 2020, versus the 5.74 percent calculable last month.

The aerospace industry was hard hit by the pandemic because of all the national and worldwide travel restrictions put in place. In October, however, this sector’s jobs comeback generally continued strongly. Employment by aircraft manufacturers expanded by 3,900 that month, the best such result since June, 2021’s 4,400. September’s initially reported 1,300 increase was taken down a peg to 1,200, but August’s initially reported gain of 1,300 was revised up to 1,700 and left unrevised yesterday morning. As a result, aircraft manufacturing jobs are now 5.85 percent below their immediate pre-pandemic levels, versus the 7.41 percent calculable last month.

Aircraft engines- and engine parts-makers boosted payolls by 700 in October, their best such perfomance since July’s 800. Revisions were negative on balance, with September’s initially reported job decrease of 100 staying unrevised and August’s initially reported increase of 800 downwardly revised to a final figure of 400. Aircraft engines- and engine parts-makers employment consequently closed to within 8.07 percent of its pre-February, 2020 level, versus the 8.83 percent calculable last month.

Non-engine aircraft parts- and equipment-makers hired 100 net new workers in October, and revisions were mixed. September’s initially reported slip of 500 is now judged to have been one of 700 but August’s initially reported jump of 1,100 was revised up to a final figure of 1,300 – the best such result since January’s 1,400. The non-engine aircraft parts workforce is now 14.45 percent smaller than in since February, 2020 versus the 14.36 percent calculable last month.

The surgical appliances and supplies category contains the personal protective equipment, respirators, and other products central to the U.S. response to the CCP Virus, and kept on enlarging its workforce (by 400) in October. Revisions were mixed, as September’s initially reported job decrease of 200 was downgraded to one of 300, but August’s reported gains have been upgraded from.700 to 800 to 900 – the strongest such perfomance since March’s 1,100. Employers in this sector have now increased their workforce by 5.59 percent since just before the pandemic’s economic – and health – impact began to be fully felt, versus the 5.11 percent calculable last month.

The employment total for pharmaceuticals and medicines flatlined in October, and revisions were oveall negative. September’s initially reported employment expansion was revised up from 1,000 to 1,200 – the best since June’s 4,000. But August’s initially reported gain of 1,700 remained at a significantly downgraded 300. The head count in this sector is now 11.64 percent bigger than in immediately pre-pandemic-y February, 2020 versus the 11.58 percent calculable last month.

Finally, the medicines subsector containing vaccines added 600 net new workers in October in the strongest job increase since June’s 900. Revisions, though, were mixed, with September’s initially reported gain of 200 upped to 500 but August’s initially reported 900 increase now estimated at a decrease of 600 – the biggest drop since December, 2018’s 1,100. Vaccine-makers’ payrolls have now swelled by 26.29 percent since February, 2020, versus the 25.58 percent calculable last month.

The confusion surrounding the U.S. economy’s growth prospects for the foreseeable future inevitably create uncertainty about manufacturing’s outlook. As noted in this previous post, many forward-looking indicators look pretty worrisome, but at least through the end of this year, expansion seems to have  been continuing at a healthy rate.

Big questions about the Federal Reserve’s approach to inflation-fighting are also clouding the manufacturing forecast. But what may be especially revealing is that even during the first half of this year, when the economy tumbled into a recession, manufacturing, along with the rest of the private sector kept hiring, and kept reporting a strong desire to fill lots of empty positions. So until some convincing evidence appears that this striking, pandemic-era pattern will change if a slowdown does begin, I’ll be cautiously bullish about manufacturing job creation.

(What’s Left of) Our Economy: How Much Longer Can U.S. Manufacturers Keep Adding Jobs?

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aircraft, aircraft engines, aircraft parts, automotive, chemicals, Employment, fabricated metals products, food products, Jobs, Labor Department, machinery, manufacturing, non-metallic mineral products, pharmaceuticals, plastics and rubber products, printing, semiconductors, surgical equipment, transportation equipment, vaccines, {What's Left of) Our Economy

Maybe the next sets of official figures will show that U.S.-based manufacturing is finally succumbing to a series of formidable obstacles that have been placed in its way recently and not-so-recently: signs of a slowing U.S. economy, a Federal Reserve whose anti-inflation policies seem certain to undercut growth, major troubles in the big export markets so important to domestic industry, a super-strong dollar that harms its price-competitiveness all over the world, and continuing supply chain snags.

As of the September jobs data released on Friday, however, domestic industry has continued to hire – which is almost always a sign of optimism.

Manufacturers in the United States increased their payrolls by 22,000 on net last month, and revisions overall were positive. The August employment rise was upgraded from 22,000 to 29,000, July’s results were revised up a second time, to 37,000, and the June numbers, originally reported as a gain of 29,000, have been brought down only to 27,000 and finally (for now!) 25,000.

These advances pushed manufacturing headcounts 0.74 percent above their levels in February, 2020 – the last data month before the CCP Virus pandemic began massively weakening and distorting the entire economy. As of last month’s jobs report, the pandemic-era gain had been 0.52 percent.

Industry’s jobs comeback hasn’t been quite as strong as that staged by the overall private sector (where employment is up by 0.86 percent since February, 2020). But that’s partly because domestic manufacturing lost fewer jobs relatively speaking than the rest of the economy (still dominated by the pandemic-devastated service sector) during the CCP Virus-induced nosesdive.

In addition, with government employment at all levels still down 2.61 percent since February, 2020, manufacturing has added more jobs proportionately than the total U.S. non-farm payrolls sector (NFP – Washington’s definition of the American employment universe) – whose workforce is up by just 0.34 percent during this period.

September’s increase left manufacturing employment at the same share of private sector employment as calculable from August’s jobs report (9.85 percent), and up from its 9.83 percent share just before the pandemic struck in full force. But as a percentage of NFP, manufacturing jobs inched up from the 8.41 percent calculable last month to 8.42 percent – a nice improvement from its 8.38 percent share in February, 2020.

Domestic industry’s employment progress is also evident from historical comparisons. At 12.880 million, its workforce remains the biggest since November, 2008’s 13.034 million. Last month’s initially reported 12.852 million manufacturing workers were the highest figure only since July, 2019’s 12.832 million.

September’s biggest manufacturing jobs winners among the broadest sub-sectors tracked by the U.S. Labor Department were:

>transportation equipment, which added 8,400 workers on month. Revisions, moreover, were strongly positive. August’s initially reported 2,400 growth was upgraded all the way up to 10,500. July’s results have now been revised up from 2,200 to 12,600 to and now 13,600 (the best monthly figure since March’s 25,000 burst). And after having been downgraded from 7,200 to 4,300, June’s final jobs improvement stayed at an upgraded 5,700.

These increases mean that employment in this sector is now down just 0.52 percent since immediately pre-pandemic-y February, 2020, versus the 1.52 percent gap that had remained as of last month;

>food manufacturing, whose hiring of 7,800 net new workers was its best monthly performance since February’s 11,100 rise. Revisions were generally positive, too. August’s initially reported 2,400 job loss is now pegged as a drop of just 1,000. After a downward revision from a 1,800 rise to one of 1,600, July’s increase is now pegged at 5,000. But June’s number was downgraded again – from an initially reported 4,800 increase to one of 3,500 to one of 2,400.

Consequently, employment in food manufacturing is now 3.40 percent higher than in February, 2020, versus the 2.64 percent increase calculable last month.

>fabricated metals products, which continued its hiring tear in September by boosting employment by 6,300 – its best such performance since May’s 6,600. Revisions were mized, though. August’s initially reported gain of 4,700 has been dialed back to 2,800, and after having been upgraded from a 4,200 increase to one of 4,600, July’s job creation is now pegged at 4,300. Along with June’s downwardly revised final result of a 200-job gain, these results brought the sector’s employment to within 1.36 percent of its immediate pre-CCP Virus levels, versus the 1.64 percent calculable last month; and

>chemicals, where the headcount climbed by 3,400 on month in September. Revisions, moreover, were positive, with August’s initially reported increase of 3,500 revised up to 3,900, July’s downgraded 2,900 gain revised back up to 4,100 (the best such result since May’s 5,100), and June’s increase staying at an upgraded 3,900.

This big sector has now expanded its employment since February, 2020 by 6.68 percent, versus the 6.09 percent calculable last month.

The biggest September manufacturing jobs losers among these broad categories were:

>printing and related support activities, which lost 4,000 jobs sequentially in September– its worst monthly performance since the 73,100 catastrophe of April, 2020, during the worst of the pandemic. And revisions overall were negative. August’s initially reported 1,100 payroll increase is now pegged at just 700. July’s initially reported 2,000 employment rise was downgraded a second time – to 400. June’s results, though, were upgraded a second time – from a initially reported 900 jobs decrease to an advance of 100.

But all told, this sector’s workforce has now fallen by 11.11 percent since just before the pandemic hit the U.S. economy in full force, versus the 9.78 percent calculable last month

>machinery, whose 1,700 employment reduction in September was its worst such performance since May’s 800 decline, and especially discourgaging since its products are so widely used throughout the economy. Worse, revisions were negative. August’s initially reported 2,800 jobs increase is now pegged at 2,200, July’s gains have been downgraded a second time – from 3,400 to 3,300 to 2,800. But at least June’s improvement remained at an upgraded 2,400.

Employment in this crucial industry is now off by 1.40 percent since February, 2020, versus 1.15 percent calculable last month;

>non-metallic mineral products, where the workforce sank by 1,500 in September for its worst monthly performance since May, 2021’s 5,300 drop. Revisions, however, were slightly positive. August’s initially reported hiring of 2,800 was revised up to 3,400 – the best monthly increase since last December’s identical total. July’s initially reported advance of 1,000 was revised down to one of 700 after having been upgraded to 1,100. But June’s initially reported employment dip of 400 is now juded to have been an increase of 700.

Yet employment in the non-metallic minerals sector dropped back to 1.47 percent below its February, 2020 levels, versus the 1.05 percent calculable last month; and

>plastics and rubber products, whose 1,400 September jobs decline was its worst such performance since payrolls sank by 4,400 in September, 2021. Revisions were negative, too. The initially reported August increase of 900 is now estimated to have been only 100. After being upgraded from a gain of 1,200 to one of 1,400, plastics and rubber employment is now judged to have retreated 400 in July. And June’s increase stayed at a sharply downgraded 2,400.

Whereas last month’s jobs report showed that employment in this sector had climbed by 4.23 percent during the pandemic era, that figure now stands at 3.65 percent.

Most sectors of special interest since the CCP Virus’ early 2020 arrival turned in good recent hiring numbers.

>The automotive sector, whose employment volatility has influenced many of manufacturing’s monthly employment performances during the pandemic period, boosted its payrolls by 8,300 in September, and overall revisions were exceptionally strong. August’s initially reported job loss of 1,900 is now recorded as a gain of 4,000. July’s results have been revised up from a 2,200 drop to a 3,600 rise to an advance of 8,400 (the best such results since March’s 18,400 jump). And June’s initially reported increase of 2,100 has been modestly downgraded to one of 1,700.

Jobs in vehicle- and parts-making is now 2.33 percent above its February, 2020 levels, versus the increase of 0.44 percent calculable last month.

As always, the most detailed employment data for other pandemic-related industries are one month behind those in the broader categories, but most turned in solid August performances, too.

The shortage-plagued semiconductor industry added 1,200 workers on month in August, and revisions were modestly mixed. July’s initially reported 2,300 increase (the best since June, 2020’s 3,000) was downgraded to 2,200, but June’s totals stayed at a slightly upgraded 1,900.

Semiconductor employment is now 5.15 percent higher than in February, 2020, versus the 4.36 percent calculable last month. But don’t forget: These increases have been held down to an extent by the baseline effect, since semiconductor companies kept hiring modestly on net during the worst of the pandemic.

Aircraft manufacturers hired 1,300 workers in August, and revisions were mixed. July’s initially reported employment increase of 2,400 (the best such performance since June, 2021’s 4,400) was revised up to 2,500, but June’s advance stayed at a downgraded 1,200.

As a result, aircraft manufacturing payrolls closed to within 8.11 percent of their February, 2020 totals, versus the 8.69 percent calculable last month.

Aircraft engines- and engine parts-makers hired 400 new workers in August but revisions were negative. July’s initially reported 900 increase is now estimated at 800, and June’s increase stayed at a downwardly revised 700.

Aircraft engines and engine parts-makers now employ just 8.62 percent fewer workers than in February, 2020, versus the 8.94 percent calculable last month.

The 1,100 August employment increase in non-engine aircraft parts and equipment represented its best monthly performance since January’s 1,400. But revisions here were mixed as well, with July’s initially reported 600 jobs decline now pegged at 800 (the worst such performance since last December’s decrease of 900), but June’s totals stayed at an upgraded 900.

These companies’ payrolls are now 14.10 percent lower than in immediately pre-pandemic-y February, 2020 versus the 14.88 percent calculable last month.

The surgical appliances and supplies category has been in the national spotlight throughout the pandemic era, since it includes personal protective equipment and other anti-virus medical goods. Its August headcount increase totaled 700 and July’s upgrade from 700 new hires to 800 produced its best employment creation month since March’s 1,100. June’s job loss of 800 stayed unrevised, though.

These companies have now boosted their post-February, 2020 workforces by 4.11 percent, versus the 4.36 percent calculable last month.

The large pharmaceuticals and medicines raised employment by 1,700 in August, but revisions were mixed. July’s initially reported job decline of 500 is now judged to be 1,000, but June’s hiring spurt of 4,000 – the industry’s best since the 1990 start of the data series – stayed intact.

These employment ups and downs left job levels in this sector now 11.71 percent higher since February, 2020 versus the 11.32 percent calculable last month.

As for the medicines subsector containing vaccines, it boosted its employees by 900 in August. July’s initially reported 200 job loss was upgraded to one of 100, but June’s improvement stayed at a slightly downgraded 900.

This subsector’s workforce is now 26.90 percent larger than just before the pandemic struck in full force, versus the 25.89 percent calculable last month.

At this point, it’s difficult to imagine domestic industry continuing to overcome the headwinds mentioned in the lead paragraph – at least for much longer. But a few years ago, even keeping in mind the mammoth stimulus poured into the economy recently. it would have been difficult imagining U.S.based manufacturing overcoming a worldwide pandemic, an equally worldwide transport and logistics crisis, a major war in Europe, and raging inflation – not to mention a serious tigthening of credit conditions, aimed at taming that inflation, following decades of super-easy money.

The bottom line seems to be a sector that – like the economy as a whole – is standing on a knife edge, but whose record of resilience lately shouldn’t be forgotten too quickly.

(What’s Left of) Our Economy: U.S. Manufacturing Job Creation Enters the Goldilocks Zone

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For now, the term “Goldilocks” seems to be an increasingly popular and accurate way to describe the U.S. economy. (See, e.g., here.) As in the Three Bears-y it’s not running too hot (and therefore unlikely to prompt the Federal Reserve to step up its inflation-fighting efforts enough to trigger a recession). And it’s not running too cold (and prompting the Fed to accept current inflation levels for fear of sparking a really deep slump).

So it wasn’t entirely surprising that yesterday’s official U.S. manufacturing jobs figures were pretty Goldilocks-y themselves.

They showed that domestic industry boosted its payrolls on month in August by 22,000 – the smallest amount since May’s 19,000, but still representing growth. Further, the revisions of the solid June and July gains were modestly positive. The former received its second downgrade – from an initially reported 29,000 to 27,000 to 25,000. But the latter was upgraded from 30,000 to 36,000.

As a result, manufacturing employment is now 0.52 percent greater than in February, 2020 – the last full month before the CCP Virus pandemic struck the United States in full force and, along with lockdowns and voluntary behavioral curbs, generated a brief but historic depression. As of last month’s jobs report, manufacturing employment had grown by 0.32 percent during this period.

That’s a slower employment recovery than that staged by the overall private sector (0.68 percent). But U.S.-based industry shed fewer jobs proportionately than the rest of the private economy during that pandemic nosedive.

Moreover, because government employment is still down 2.82 percent since the virus arrived, manufacturing’s job creation has been way ahead of the performance of the non-farm sector (the federal government’s definition of the American jobs universe). That measure’s headcounts have advanced only 0.16 percent.

These results have left manufacturing at the same 9.85 percent of total private sector jobs as last month (and up from its 9.83 percent share in February, 2020), and at the same 8.41 percent share of all non-farm jobs as last month (and up from its 8.38 percent share just before the pandemic economy began).

Another indicator of manufacturing’s relatively strong recent jobs performance – at 12.852 million, its workers’ ranks are at their highest level since November, 2008’s 13.034 million. Last month’s initially reported 12.826 million manufacturing workers were the highest figure only since August, 2019’s 12.827 million.

August’s biggest manufacturing jobs winners among the broadest sub-sectors tracked by the U.S. Labor Department were:

>fabricated metals products, which added 4,700 workers on net last month. And this big sector has been on a hot streak lately. July’s results were revised up from a gain of 4,200 to one of 4,600, June’s unrevised 600 job loss is now judged to be an increase of 200, and May’s robust figures have only been revised down from 7,100 to 6,600.

These companies’ payrolls have now advanced to within 1.64 percent of their immediately pre-pandemic level, versus the 2.04 percent deficit calculable last month;

>computer and electronics products, which contains shortage-plagued semiconductor sector, added 4,500 employees sequentially in August, and revisions were strong. July’s initially reported 3,400 gain is now estimated at 3,900. June’s results rebounded from a downgrade of 2,300 to 2,000 to an upgrade to 2,900. And May’s final (for now) upwardly revised 5,300 increase stayed unchanged.

This sector now employs just 0.96 percent more workers than in February, 2020, versus the 0.41 percent rise calculable last month. But it’s important to recall that computer and electronics firms’ headcounts fell only minimally during the first sharp pandemic downturn;

>the very big chemicals industry, which boosted hiring by 3,500 on month in August. Revisions were somewhat negative but still left good growth in their wake. July’s initially reported improvement of 3,700 was downgraded to 2,900. June’s initial huge upgrade from 1,200 to 4,500 fell back to an increase of 3,900 and May remained at 5,100.

Since February, 2020, chemicals companies have increased employment by 6.09 percent, versus the 5.84 percent calculable last month;

>machinery, which is such a manufacturing- and economy-wide bellwether because its products are used by so many industries. Its firms’ payrolls climbed by 2,800 sequentially in August. Revisions, moreover, were encouraging. July’s initially reported 3,400 improvement was revised down slightly to 3,300. But June’s totals have now been upgraded from 1,000 to 1,600 and now to 2,400. And May’s initially reported monthly drop of 3,200 is now pegged at one of just 800.

Machinery employment is now off by just 1.15 percent since immediate pre-pandemic-y February, 2020, versus the 1.47 percent calculable last month; and

>non-metallic mineral products, whose monthly jobs advance of 2,800 in August was its best such performance since February’s 3,100. July’s initially reported gain of 1,000 was revised up to 1,100. June’s initially reported 400 loss has stayed at an upgraded 700 gain. And May’s totals have settled at an increase of 2,100 as opposed to the 1,900 first reported.

Thanks to its strong August and positive revisions, the non-metallic minerals workforce is now a mere 1.05 percent smaller than in February, 2020, vs the 1.85 percent calculable last month

Manufacturing’s biggest August jobs losers among this same group of broad categoies were:

>food manufacturing, whose August monthly 2,400 jobs decline was its worst such performance since last August’s 2,600. In addition, revisions were negative overall. July’s initially reported 1,800 jobs advance was downgraded to 1,600. June’s initially reported jump of 4,800 has been revised down a second time – to 3,400. And after an upgrade from an increase of 6,100 to one of 7,600, May’s result is now pegged at a 7,000 gain.

Whereas food manufacturing’s employment was calculable as having grown since February, 2020 by 2.86 percent as of last month, now the figure is 2.64 percent; and

>textile product mills, whose payrolls fell by 1,000 in August for their worst such performance since July, 2020’s 2,500 decline. Revisions in this small industry were negligible. July’s initially reported dip of 300 is now judged to be a gain of 100. June’s initially reported decrease of 700 stayed unchanged after being revised up to one of 600, and May’s initially reported 100 monthly job loss has stayed unrevised.

Textile product mill employment has now shrunk by 6.44 percent since February, 2020, versus the 5.51 percent calculable last month.

As always, the most detailed employment data for pandemic-related industries are one month behind those in the broader categories, and their July performances were generally in line with that month’s continued overall manufacturing hiring.

The recent employment upswing in that shortage-plagued semiconductor industry continued in July, as the month’s payroll increase of 2,300 was the best such performance since June, 2020’s 3,000. Revisions were positive, too, with June’s initially reported advance of 1,700 now estimated at 1,900 and May’s total staying at a slightly upgraded 1,000..

Semiconductor employment is now 4.56 percent higher than in February, 2020, on the eve of the CCP Virus-era economy, versus the 3.22 percent calculable last month. And it should be kept in mind that semiconductor companies kept hiring modestly on net during the worst of the pandemic.

The workforces of these companies are now 4.36 percent larger than in February, 2020, versus the 3.69 percent calculable last month.

Most of the aerospace cluster in July kept regaining the unusually large numbers of jobs lost during the pandemic period due largely to the steep CCP Virus-related travel downturn.

Aircraft production companies hired another 2,400 workers that month – their best such performance since June, 2021’s 4,400. June’s initially reported 1,500 employment increase was downgraded to 1,200, but May’s net new job creation remained at an upgraded 1,600.

In all, aircraft manufacturing payrolls advanced to within 8.69 percent of their immediate pre-pandemic levels, versus the 9.64 percent shortfall calculable last month.

In aircraft engines and engine parts, firms added 900 employees on net in July, and although June’s initially reported 800 increase was revised down to 700, May’s results remained at a 900 improvement after being upgraded fom 700.

Aircraft engines and engine parts-makers now employ just 8.94 percent fewer workers than in immediately pre-pandemic-y February, 2020, versus the 9.81 percent deficit calculable last month.

Non-engine aircraft parts and equipment makers stayed jobs laggards, though, as they shed 600 workers in July – their worst such performance since last December’s 900 loss. June’s initially reported jobs gain of 600 was upgraded to a 900 increase, and May’s initially reported growth of 300 remained unrevised for a second straight month. But payrolls in this industry are now 14.88 percent below their February, 2020 levels, versus the 14.62 percent calculable last month.

Most healthcare manufacturing, however, experienced an off month hiring-wise in July.

In surgical appliances and supplies (which includes all the personal protective equipment and other medical goods so widely used to fight the CCP Virus), 700 net new jobs were created in July. June’s 800 net job loss stayed unrevised July, as did May’s slightly upgraded monthly increase of 500.

Since February, 2020, this sector’s headcount is up by 4.36 percent, versus the 3.69 percent calculable last month.

Yet the large pharmaceuticals and medicines industry lost 500 jobs in July – although this dip followed a downwardly revised 4,000 employment surge in June that was still the best monthly result for the sector going back to the 1990 start of this data series. Moreover, May’s upwardly revised employment increase of 1,200 remained the same.

Still, whereas employment in this sector was up by 11.58 percent since the pandemic’s economy-shaking arrival as of last month’s jobs report, that increase had slipped to 11.32 percent as of this month’s release.

And the medicines subsector containing vaccines lost 200 jobs in July, and revisions were slightly negative. June’s initially reported 1,100 increase was downgraded to one of 900, and May’s slightly upgraded 700 monthly gain stayed unchanged.

Vaccine manufacturing employment has still climbed by 25.89 during the CCPVirus period. But as of last month, this figure was 26.29 percent.

For the foreseeable future, industry’s employment prospects seem likely to be buffeted by the same crosswinds it’s been dealing with for many months now – on the one hand, ongoing (but possibly fading) supply chain issues, high (but possibly fading) inflation, and a Federal Reserve evidently bent on cooling price increases even if it slows economic growth considerably; on the other hand, demand for manufactures by consumers and businesses that keeps displaying impressive strength.

And let’s not forget a U.S. dollar that’s the strongest in decades, and that should be undermining domestic manufacturing because it still relies so heavily on exports, and the greenback’s rise damages the price competitiveness of everything made in America.

Yet U.S.-based manufacturers keep hiring – usually a sign of confidence – and I’ll keep assuming that since it’s their fortunes that are most directly on the line, I’ll view their prospects as pretty bright, and even Goldilocks-y, too.  

(What’s Left of) Our Economy: Slower Growth and More Hiring in U.S. Manufacturing, Too

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aerospace, aircraft, aircraft engines, aircraft parts, CCP Virus, chemicals, coronavirus, COVID 19, electronics products, Employment, fabricated metal products, furniture, Jobs, machinery, manufacturing, medicines, miscellaneous durable goods, non-farm jobs, non-farm payrolls, paper, paper and paper products, pharmaceuticals, recession, semiconductors, surgical equipment, textiles, vaccines, {What's Left of) Our Economy

When it comes both to the U.S. economy in general and domestic manufacturing in particular, this morning’s official jobs report (for July) strongly supported a widely held supposition of economists – that employment is a lagging indicator of trouble.

That’s because laying off workers supposedly is seen as a last resort by businesses facing bad times, and the new results for non-farm payrolls (the U.S. government’s definition of the national jobs universe) seems to have validated this view in spades. Even though the economic growth has been slowing dramatically from last year’s rapid pace, employers boosted their headcounts by a stunning 528,000 last month (including 471,000 in the private sector). And even though inflation-adjusted American manufacturing production has fallen for the last two data months (May and June – the July results will come out August 16), U.S.-based industry added workers for the fifteenth straight month.

Indeed, July’s 30,000 increase in manufacturing jobs was the biggest monthly gain since April’s 61,000. And the numbers included the best hiring month of all time (or at least since that data series began in 1990) for the big pharmaceuticals and medicines industry. Moreover, revisions left the solid results of June and May virtually unchanged.

As a result, domestic manufacturing employment is 0.32 percent higher than its level in February, 2020 – just before the CCP Virus struck the U.S. economy in force and sent economic activity spiraling downward. Last month, when it finally regained its pre-pandemic jobs levels, the net gain was 0.09 percent.

Since July’s overall jobs improvement was so great, manufacturing is no longer the economy’s post-pandemic employment champion. That title has passed again to the total private sector, where payrolls are now 0.49 percent higher than in February, 2020. But manufacturing’s net job creation pace continues to exceed that of the non-farm economy (which includes the public sector). Its workforce is just 0.02 percent larger than just before the pandemic’s arrival.

The huge July surge in non-farm and private sector net hiring did depress manufacturing’s share of those workforces – from 9.86 percent of private sector jobs to 9.85 percent, and from 8.42 percent of non-farm jobs to 8.41 percent. But manufacturing employment is still up in relative terms since February, 2020 – climbing from 9.83 percent of private sector employment and 8.38 percent of non-farm employment.

Job-creation winners abounded throughout manufacturing’s major sectors in July, with the standouts being:

>fabricated metals products, where payrolls grew by 4,200. Revisions, however, continued to be weak, with June’s sequential loss remaining at 600; May’s originally reported 7,100 surge revised lower first to 6,900 and now to 6,600 (still the best since February’s 9,300 pop); and April’s results staying at a twice downgraded 1,400. Employment in this big sector is now 2.04 percent below its immediate pre-pandemic levels, versus the 2.31 percent shortfall calculable last month;

>miscellaneous durable goods (the major category containing many of the key medical devices used to combat the virus), which added 3,700 workers in its strongest monthly performance since last November’s 10,400. But revisions were on balance negative here, too, with June’s initially reported 2,400 job growth now judged to have been 1,700, May’s initially upgraded 1,300 advance downgraded to 1,000, and only April’s results breaking the pattern, with its upgraded 600 job loss staying unchanged.

Miscellaneous goods’ workforce is now 2.79 percent higher than in February, 2020, versus the 2.36 percent calculable last month;

>chemicals, which remained on a hot streak last month. Its companies added 3,700 employees on month in July, its June performance was revised way up from a 1,200 improvement to 4,500, its initially downgraded May rise upgraded to 5,100 (the greatest improvement since January’s 5,500), and April’s increase settling at 1,700 after being first reported as 1,000. As of July, 5.84 percent more workers were employed in the chemicals industry than in February, 2020, versus the 4.83 percent calculable last month; 

>machinery, which RealityChek regulars know is a bellwether for the rest of manufacturing and the whole economy because of how widely its products are used. Its employment increased by 3,400 on month in July; June’s initially reported 1,000 rise is now pegged as 1,600; May’s initially reported 3,200 job decrease has now ben revised all the way up to a jobs gain of 200; and April’s final total stayed at a twice downgraded 5,800. Consequently, machinery employment has rebounded to within 1.47 percent of its immediate pre-pandemic level, versus the 2.05 percent shortfall calculable last month; and 

>computer and electronics products, which contains shortage-plagued semiconductor sector, also boosted its employment by 3,400 sequentially in July. June’s initially reported 2,300 net new job creation is now judged to have been 2,000, but May’s totals were revised up a second time, to 5,300 (its best monthly performance since the 6,300 recorded in May, 2020, during the economy’s strong bounceback from the first CCP virus wave), and April’s thrice upgraded figure remained the same at 4,900. This progress pushed headcounts in this sector 0.41 percent above their February, 2020 levels, versus the 0.11 percent calculable last month.

The worst performers among July’s few maufacturing losers:

>paper and paper products, where employment fell month-to-month by 1,200. At the same time, June’s initially reported 1,200 job increase was upgraded to 1,500; May’s advance was revised down but still remained at an increase of 700; and April’s initially downwardly revised 1,300 employment rise stayed at an upwardly revised 2,100 increase. Nonetheless, there are now 0.86 percent fewer jobs in paper and paper products compared with February, 2020, versus the 0.22 percent dip calculable last month;

>textile mills, whose July employment was off by 600. Revisions were mixed, with June’s initially reported jobs bump of 700 now judged to have been 300, but May’s initially reported payroll decrease of 700 now upgraded to a loss of 400, and April’s upgraded 800-job increase remaining the same. Since just before the pandemic arrived,, however, textile mill jobs have shrunk by 6.18 percent, versus the 5.15 percent calculable last month; and

>furniture and related products, where headcounts sank by 600 on month. Worse, revisions on balance were decidedly negative. June’s initially reported employment improvement of 100 is now considered to be a drop of 1,100; May’s results, first reported as a 1,000 jump, were downgraded a second time to a mere 100 advance; and April’s initially reported 1,100 drop have been revised up only to 900 job loss. Whereas as of last month, the furniture complex’s workforce had risen to 0.60 higher than its February, 2020 level, it’s now sunk back to 0.03 percent lower.

As always, the most detailed employment data for pandemic-related industries are one month behind those in the broader categories, and most turned in performances even better than manufacturing as a whole.

The semiconductor industry is still struggling with the aforementioned shortages that are hampering so many other parts of the economy. But the 1,700 jobs it added on month in June were the most since the 1,800 in January, 2019, and revisions were positive. May’s initially reported 800 jobs gain is now pegged as having been 1,000 and April’s first reported 100 increase has been upgraded more than ten-fold – to 1,100.

The upshot seems to be that the recent high profile announcements of new domestic microchip fab construction are showing up in the employment data. As of last month, the sector’s payrolls were only 2.20 percent higher than just before the pandemic’s large-scale onset (though in fairness, semiconductor employment actually rose during the steep 2020 downturn). As of today, however, employment is up 3.22 percent during that period. (Note: The 1,400 semiconductor job growth I said last month took place in December, 2021 in fact came in the previous December. Apologies for the error.)

In surgical appliances and supplies (which includes so many of the personal protective equipment and other medical goods so widely used to fight the CCP Virus), June employment dropped by 800 – these companies’ worst monthly performance since last July’s 1,100 decline. At least revisions were positive. May’s initially reported gain of 400 is now estimated at 500, and April’s figure stayed at an upgraded loss of 100. The surgical appliances and supplies sector now employs 3.69 percent more workers than in February, 2020; last month, this increase had been 4.36 percent.

The pharmaceuticals and medicines industry, by contrast, generated record-smashing net job creation in June. The 4,300 rise was the biggest monthly total ever in a data series that goes back to 1990, and greatly eclipsed the old mark of 3,200 recorded in September, 2019. Revisions, moreover, were excellent, with May’s initially reported 100 payroll decline now raised all the way up to a 1,200 gain, and April’s increase remaining at an upgraded 1,500. Headcounts in these businesses are now 11.58 percent higher than just before the pandemic, versus the 10.10 percent calculable last month.

The much smaller medicines subsector containing vaccines performed well on the jobs front, too, hiring 1,100 net new workers in June. In addition, May’s initially reported 600 increase is now judged to have been 700, and April’s monthly improvement stayed at 1,100. This subsector’s workforce has now expanded by 26.29 percent since just before the pandemic arrived in force, as opposed to the 24.47 percent calculable last month.

An aerospace cluster hit especially hard by CCP Virus-related travel restrictions experienced another robust employment month in June.

Aircraft companies hired 1,500 net new workers on month, and revisions were excellent as well. May’s initially reported net new hires figure was upgraded from 1,300 to 1,600 – their best such performance since last June’s increase of 4,400 (mis-reported last month as a rise of 4,000). And April’s advance remained at an upgraded 500. As a result, the aircraft workforce is only 9.64 percent smaller than just before the pandemic arrived, versus the 10.30 percent calculable last month.

Aircraft engines and engine parts jobs were up by 800 sequentially in June, May’s initially reported increase of 700 was revised up to 900, but April’s results stayed at a downwardly revised 800. This improvement enabled employment at these firms to come within 9.81 percent of their February, 2020 levels, versus the 10.91 percent calculable last month.

These increases were mirrored in the non-engine aircraft parts and equipment industry, which added 600 workers on month. May’s initially reported 300 jobs increase remained unrevised as did April’s upgraded 400 increase. The non-engine aircraft parts and equipment sectors, as a result, crept to within 14.62 percent of their employment levels of February, 2020, versus the 15.14 percent calculable last month.

The big questions for American workers, and domestic industry as a whole including manufacturing, are whether economic growth will really continue to deteriorate further (here’s a recent forecast that it won’t, at least in the third quarter); and if it does, will businesses continue to “hoard” labor. Let me know if there’s anyone you trust to provide accurate answers.

(What’s Left of) Our Economy: Revisions Take U.S. Manufacturing’s Solid Pandemic-Era Performance Down a Notch

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aerospace, aircraft, aircraft parts, apparel, appliances, CCP Virus, chemicals, computer and electronics products, coronavirus, COVID 19, durable goods, electrical components, electrical equipment, fabricated metal products, Federal Reserve, furniture, inflation-adjusted output, machinery, manufacturing, medical devices, miscellaneous durable goods, miscellaneous nondurable goods, nondurable goods, nonmetallic mineral products, paper, petroleum and coal products, pharmaceuticals, plastics and rubber products, printing, real growth, recession, semiconductors, textiles, wood products, Wuhan virus, {What's Left of) Our Economy

Sharp-eyed RealityChek readers have no doubt noticed my habit of noting that “final” versions of official U.S. economic data are typically final only “for now.” That’s because Washington’s statistics gathering agencies, to their credit, look back regularly on several years’ worth of figures to see where updates are needed because new information has come in, and this morning, the Federal Reserve released its own such “benchmark” revision of its manufacturing production data.

The results don’t contain any earthshaking changes, but they do alter the picture of domestic industry’s inflation-adjusted growth during the pandemic period, as well as of the performance of specific sectors, in non-trivial ways.

The main bottom lines: First, the Fed previously estimated that U.S.-based manufacturers had increased their constant dollar production from February, 2020 (the month before the CCP Virus’ arrival in force began roiling the entire American economy) through last month, by 4.94 percent. Today, the Fed told us that the advance was just 4.12 percent.

Second, as a result, domestic industry has further to go in real terms to recover its all-time high than the central bank had judged. As of the last regular monthly industrial production increase, U.S.-based manufacturing was 2.41 percent smaller after inflation than in December, 2007 – still its peak. But the new figures show that these manufacturers are still three percent behind the after-inflation output eight-ball.

Third, and especially interesting given the recent, significant U.S. growth slowdown and distinct possibility of a recession before too long, the revisions add (though just slightly) to the evidence that the overall economy’s woes this year are indeed beginning to affect manufacturing. Before the revision, the Fed judged that real manufacturing output had expanded by 2.68 percent between last December and this May, and slipped by 0.07 percent between April and May. The new figures: 2.46 percent and -0.22 percent, respectively.

The virus-era downward revisions affected durable goods and nondurable goods industries alike. The previous price-adjusted growth figure for the former during the pandemic period was 6.31 percent. Now it’s pegged at 5.18 percent. For the latter, the downgrade was from 3.42 percent to 2.99 percent.

Before the revisions, of the twenty broadest sub-sectors of manufacturing tracked by the Fed, only five suffered inflation-adjusted production declines from immediate pre-pandemic-y February, 2020 through this May, and all were found in the nondurables super-category. They were miscellaneous non-durable goods (down 11.43 percent), textiles (down 3.80 percent), paper (2.33 percent), printing and related activities (1.89 percent), and petroleum and coal products (1.21 percent).

The new data show that the number of growth losers has expanded to eight;. Four sectors were added: fabricated metals products (down 1.30 percent), nonmetallic mineral products (1.06 percent), apparel and leather goods (off by 0.59 percent), and furniture and related products (0.17 percent). And petroleum and coal products’ contant dollar production was upgraded from a 1.21 percent decrease during the pandemic period to a 2.96 percent gain.

The names on the list of top five pandemic period growers remained the same, with after-inflation production actually improving in aerospace and miscellaneous transportation (from 18.99 percent to 19.69 percent), miscellaneous durable goods (from 11.41 percent to 12.43 percent), and machinery (from 6.29 percent to 6.52 percent). But real production gains were revised down in computer and electronics products (from 10.42 percent to 7.38 percent), and chemicals (from 8.48 percent to 7.55 percent).

In absolute tems, the biggest price-adjusted output upgrades were registered in miscellaneous nondurable goods (from an 11.43 pecent nosedive to a smaller drop of 7.56 percent), electrical equipment, appliances and components (from a 2.19 percent rise to one of 4.95 percent), the aforementioned petroleum and coal products sector, wood products (from a 5.24 percent increase to 6.45 percent), and plastics and rubber products (from 1.78 percent growth to 2.76 percent).

The biggest real production downgrades came in the printing sector (all the way from a 1.89 percent inflation-adjusted output shrinkage to one of 9.52 percent), apparel and leather goods (from a 4.59 percent real production rise to a 0.59 percent dip), nonmetallic mineral products (from 2.58 percent price-adjusted growth to a 1.06 percent decline), and the aforementioned computer and electronics product sector.

RealityChek has been following with special interest narrower sectors that have attracted unusual attention since the CCP Virus arrived, and the new industrial production revision shows that constant dollar output climbed by more than previously estimated in aircraft and parts (24.89 percent versus 19.08 percent) and medical equipment and supplies (14.48 percent versus 11.51 percent), and by less in semiconductors and other electronic components (22.48 percent versus 23.82 percent) and in pharmaceuticals and medicine (12.79 percent versus 14.78 percent).

These Fed revisions are hardly a reason to push the panic button about U.S. manufacturing. But because domestic industry’s fortunes during the pandemic era have been so closely tied to blazing hot demand for its products, it’s hardly great news to learn that with signs abounding of a slumping American economy, manufacturing is approaching this apparent downturn in less robust shape than thought as late as yesterday.   

(What’s Left of) Our Economy: U.S. Manufacturing’s Hiring Takes a (Slight) Breather

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aerospace, aircraft, aircraft engines, aircraft parts, automotive, CCP Virus, chemicals, computer and electronics products, coronavirus, COVID 19, fabricated metals products, Federal Reserve, fiscal policy, food products, inflation, Jobs, Labor Department, machinery, manufacturing, medical devices, medicines, monetary policy, non-farm jobs, non-farm payrolls, personal protective equipment, pharmaceuticals, PPE, semiconductor shortages, semiconductors, stimulus, transportation equipment, Ukraine, Ukraine-Russia war, vaccines, wood products, {What's Left of) Our Economy

U.S.-based manufacturing’s employment performance has been so strong lately that the 18,000 net gain for May reported in today’s official U.S. jobs report was the worst such performance in more than a year – specifically, since April, 2021’s 28,000 employment loss. And even that dismal result stemmed mainly from automotive factories that were shut down due to semiconductor shortages – not from any underlying weakness in domestic industry.

Moreover, revisions of the last several months’ of sizable hiring increases were revised higher. April’s initially reported 55,000 increase is now pegged at 61,000, and March’s headcount boost was upgraded again, this time all the way from 43,000 to 58,000.

Indeed, taken together, this payroll surge has enabled U.S.-based manufacturing to increase its share of American jobs again. As of May, industry’s employment as a share of the U.S. total (called “non-farm payrolls” by the Labor Department that releases the data) rose sequentially from the 8.41 percent calculable last month to 8.42 percent. And the manufacturing share of total private sector jobs climbed from the 9.86 percent calculable last month to 9.87 percent..

The improvement since February, 2020 – the last full data month before the CCP Virus’ arrival began roiling and distorting the entire U.S. economy – has been even greater. Then, manufacturing jobs represented just 8.38 percent of all non-farm jobs and 9.83 percent of all private sector employment.

Domestic industry still slightly lags the private sector in terms of regaining jobs lost during the worst of the pandemic-induced recession of March and April, 2020. The latter has recovered 99.01 percent of the 21.016 million jobs it shed, compared with manufacturing’s 98.75 percent of its 1.345 million lost jobs.

But the main reason is that industry’s jobs losses during those months were smaller proportionately than those of the private sector overall.

Viewed from another vantage point, the May figures mean that manufacturing employment is just 0.13 percent smaller than just before the pandemic struck.

May’s biggest manufacturing jobs winners among the broadest individual industry categories tracked by the Labor Department were:

>fabricated metals products, which boosted employment on month by 7,100 – the sector’s biggest rise since since February’s 9,300. Its recent hiring spree has brought fabricated metals products makers’ payrolls to within 2.24 percent of their immediate pre-CCP Virus (February, 2020) levels;

>food products,where payrolls grew by 6,100 sequentially in May. Employment in this enormous sector is now 2.53 percent higher than in February, 2020;

>the huge computer and electronics products sector, whose headcount improved by 4,400 over April’s levels. As a result, its workforce is now just 0.19 percent smaller than in immediate pre-pandemic-y February, 2020;

>wood products, which added 3,800 employees in May over its April levels. Along with April’s identical gain, these results were these businesses’ best since May, 2020’s 13,800 jump, during the strong initial recovery from the virus-induced downturn. Wood products now employs 6.85 percent more workers than in February, 2020; and

>chemicals, a very big industry whose workforce was up in May by 3,700 over the April total. The result was the best since January’s 5,500 sequential jobs growth, and pushed employment in this industry 4.76 percent higher than in February. 2020.

The biggest May job losers among those broad manufacturing groupings were:

>transportation equipment, another enormous category where employment fell by 7,900 month-to-month in May. That drop was the biggest since February’s 19,900 nosedive. But it followed an April monthly increase that was revised up from 13,700 to 19.500. All this volatility – heavily influenced by the aforementioned semiconductor shortage that has plagued the automotive industry – has left transportation equipment payrolls 2.57 percent smaller than just before the pandemic’s arrival in February, 2020;

>machinery, whose 7,900 sequential job decline in May was its worst such result and first monthly decrease since November’s 7,000. Moreover, April’s initially reported 7,400 payroll increase in machinery is now judged to be only 5,900. These developments are discouraging because machinery’s products are used so widely throughout the entire economy, and prolonged hiring doldrums could reflect a slowdown in demand that could presage weakness in other sectors. Machinery payrolls are now down 2.12 percent since February, 2020; andent since February 2020; and

>miscellaneous nondurable goods, where employment shrank in May by 2,900 on month. But here again, a very good April increase first reported at 3,300 is now judged to have been 4,400, and thanks to recent robust hiring in this catch-all category, too, its employment levels are 8.12 percent higher than in February. 2020.

As always, the most detailed employment data for pandemic-related industries are one month behind those in the broader categories, and their April job creation overall looked somewhat better than that for domestic manufacturing as a whole.

Semiconductors are still too scarce nationally and globally, but the semiconductor and related devices sector grew employment by 900 on month in April – its biggest addition since last October’s 1,000. March’s initially reported 700 jobs gain was revised down to 400, and February’s upgraded hiring increase of 100 stayed unrevised. Consequently, payrolls in this industry are up 1.66 percent since just before the pandemic arrived in full force, and it must be kept in mind that even during the deep spring, 2020 economy-wide downturn, it actually boosted employment.

The news was worse in surgical appliances and supplies – a category containing personal protective equipment (think “facemasks”) and similar medical goods. April’s sequential jobs dip of 200 was the worst such performance since October’s 300 fall-off, but at least March’s initially reported 1,100 increase remained intact (as did February’s downwardly revised – frm 800 – “no change.” Employment in surgical appliances and supplies, however, is still 3.88 percent greater than in immediate pre-pandemic-y February, 2020.

In the very big pharmaceuticals and medicines industry, this year’s recent strong hiring continued in April, as the sector added 1,400 new workers sequentially – its biggest gains since last June’s 2,600. In addition, March’s initially reported increase of 900 was revised up to 1,200, and February’s slightly downgraded 1,000 rise remained unchanged. Not surprisingly, therefore, this sector’s workforce is up by 9.78 percent during the CCP Virus era.

Job creation was excellent as well in the medicines subsector containing vaccines. April’s 1,100 monthly headcount growth was the greatest since last December’s 2,000. March’s initially reported payroll rise of 400 was upgraded to 600, and February’s results stayed at a slightly downgraded 500. In all, vaccine manufacturing-related jobs has now increased by fully 24.47 percent since February, 2020.

Aircraft manufacturers added just only 200 employees on month in April, but March’s jobs gain was revised up from 1,100 to 1,200 (the best such result since last June’s 4,000), and February’s upwardly revised 600 advance remained unchanged. Aircraft employment is still off by 10.96 percent since the pandemic’s arrival in force.

Aircraft engines and engine parts makers were in a hiring mood in April, too. Their employment grew by 900 sequentially, March’s 500 increase was revised up to 600, and February’s unrevised monthly increase of 900 stayed unrevised. Payrolls in this sector have now climbed to within 11.56 percent of their level just before the CCP Virus hit.

As for the non-engine aircraft parts and equipment sector, it made continued modest employment progress in April, with the monthly headcount addition of 300 following unrevised gains of 700 in March and 200 in February. But these companies’ workforces are still 15.48 percent smaller than their immediate pre-pandemic totals.

The U.S. economy is clearly in a period of growth much slower than last year’s, and since there’s no shortage of actual and potential headwinds (e.g., the course of the Ukraine War, the Fed’s monetary tightening campaign, persistent lofty inflation, the likely absence of further fiscal stimulus), no one can reasonably rule out a recession that drags down manufacturing’s hiring with it. But until domestic industry’s job creation and production growth starts deteriorating dramatically and remains weak, today’s so-so employment figures look like a breather at worst – and not much of one at that.