(What’s Left of) Our Economy: U.S. Manufacturing Employment Hits a Downdraft

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aircraft, aircraft engine parts, aircraft engines, aircraft parts, appliances, automotive, chemicals, electrical components, electrical equipment, Employment, fabricated metal product, furniture, Jobs, machinery, manufacturing, NFP, non-farm payrolls, pharmaceuticals, primary metals, private sector, semiconductors, surgical equipment, transportation equipment, vaccines, {What's Left of) Our Economy

The manufacturing jobs results contained in last Friday’s official monthly U.S. employment report were downbeat both because 2,000 positions were shed between April and May, and because that makes two months of losses out of the last three. Domestic industry hasn’t experienced a stretch that bad since the period from late 2019 through the depth of the devastating but brief CCP Virus-induced economy-wide nosedive.

And to add insult to injury, revisions were negative. April’s initially reported gain of 11,000 was downgraded to one of 10,000, and March’s losses were revised down a second time – from 8,000 to 12,00 – the worst monthly read since the 42,000 collapse of April, 2021.

In fact, these collective setbacks pushed manufacturing still deeper into post-pandemic employment laggard status. Since February, 2020 – the last full data month before the CCP Virus pandemic began hammering and distorting the entire economy – manufacturing headcounts have risen by 1.56 percent – less than the 1.61 percent calculable from last month’s release.

During the same period, non-farm payrolls (NFP – the U.S. government’s definition of the national jobs universe) have risen by 2.45 percent – an improvement over the 2.10 percent calculable last month. And private sector headcounts are up by 3.04 percent – an improvement over the 2.78 percent calculable last month.

It’s no surprise then that manufacturing’s share of American employment keeps shrinking. As of the new jobs report, it stood at 8.32 percent of NFP – lower than the 8.35 percent calculable last month and 8.39 percent just before the CCP Virus arrived state-side in force. And it represented 9.73 percent of private sector employment – lower than the 9.76 percent calculable last month and the 9.87 percent calculable in February, 2020.

May’s biggest jobs winners among the broadest manufacturing sub-sectors tracked by Washington were highly concentrated in a handful of industries:

>in the big, diverse transportation equipment sector, 10,500 positions were added sequentially, and April’s initially reported 6,700 advance was upgraded to one of 10,600. In all, transportation equipment companies have now registered four straight months of strong job creation, and their employment levels are now 4.78 percent greater than in immediately pre-pandemic-y February, 2020 versus the 3.81 percent calculable last month;

>electrical equipment, appliance and components, where a sequential jobs boost of 2,100 snapped a two-month losing streak and represented these companies’ best such performance since March, 2022’s increase of 3,000. Consequently, job levels in this sector have now advanced by 2.04 percent during the CCP Virus era and its aftermath, versus the 0.98 percent improvement calculable last month.

>primary metal manufacturing, whose 2,000 employment increase marked a fourth straight month of gains. The monthly rise was also the biggest for these companies since they hired 1,200 net new workers last October. Primary metal manufacturers’ payrolls have now moved to within 2.50 percent of their February, 2020 level, versus the 2.98 shortfall calculable last month; and

>the large chemicals industry, which improved employment by 1,700, and pushed its pandemic-era-plus headcount growth to 7.52 percent, versus the 7.49 percent calculable last month.

May’s losers among these broad were broad-based, with the biggest being:

>furniture and related products, where a jobs retreat of 4,000 was its worst such performance since last November’s 4,200 reduction. Because of this drop, the sector’s workforce is now 5.29 percent smaller than in immediately pre-pandemic-y February, 2020, versus the 3.70 percent calculable last month;

>machinery, whose 2,400 jobs fall-off was its worst such performance since the 6,500 cratering in November, 2021. This decrease, plus some negative revisions,  depressed this diverse sector’s headcount down to 0.95 percent above its February, 2020 level, versus the 1.24 percent increase calculable last month.

This poor machinery performance matters because the widespread use of its products for expansion and modernization make it an important barometer of the health both of the rest of industry and of the entire economy; and

>fabricated metal product manufacturing, another large sector which cut 2,300 positions. Whereas these companies’ headcounts had pulled to within 0.94 percent of their level just before the CCP Virus’ arrival, they’re now back to 1.21 percent below.

In addition to machinery, RealityChek has tracked another industry consistently since the virus began destabilizing the U.S. economy: automotive, whose its fortunes have so often and so heavily influenced determined those of manufacturing as a whole during the pandemic period.

As suggested by the robust hiring performance of the transportation equipment sector, April was a return to this pattern, with vehicle and parts makers bolstering payrolls by 6,800. In addition, April’s initially reported hiring increase of 5,800 was revised all the way up to 9,000 – the best such performance since last December’s 9,500 burst.

This recent surge has pushed automotive employment 8.42 percent higher than in February, 2020, versus the 7.18 percent calculable last month.

RealityChek has also been monitoring 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 April employment performances were generally mixed.

Despite the U.S. government’s decision to provide major subsidies to foster more semiconductor manufacturing in America, the sector’s employment record in April continued a weak spell that began back in January. The April loss of 800 jobs in the semiconductors and related devices category represented the sector’s fourth straight monthly decline, and March’s initially reported 300 increase is now judged to have been a steep drop of 1,700.

These dismal results – no doubt due at least partly to the return of glut conditions in many types of microchips – dragged down these companies’ employment gains to 8.86 percent above immediate pre-pandemic levels, versus the 9.20 percent improvement calculable last month.

Aircraft manufacturers shed jobs for the second straight month in April, with the 1,300 fall the worst monthly performance since May, 2021’s slide of 4,100. Along with mixed revisions, the April tumble meant that the aircraft workforce is now 3.62 percent smaller than just before the CCP Virus’ arrival in force versus the 3.29 percent calculable last month.

Hiring by aircraft engines and engine parts-makers in April dipped for the first time in three months, as these industries cut headcount by 300. The decline however, was only the first since July, 2021 and it followed a March jump of 1,000 that stayed unrevised. So employment by these companies slipped further below its February, 2020 levels, but just to 6.66 percent versus the 6.33 percent calculable last month.

By contrast, in non-engine aircraft parts, the workforce expanded for the fifth straight month – the longest period of growth since the months between January and June, 2019. The gain of 400 was also noteworthy because it followed a March increase that was upgraded from 600 to one of 800. Jobs in non-engine aircraft parts maker climbed to within 14.10 percent of their immediate pre-pandemic total, versus the 14.62 percent shortfall calculable last month.

But jobs totals for surgical appliances- and supplies-makers dipped by 500 in April. And the initially reported March flatline result for companies that turned out many of the products used to fight the virus is now judged to have been a shrinkage of 200. So where as of last month, these workforces were pegged at 1.23 percent larger than their February, 2020 levels, this growth has now been pared back to 0.57 percent.

The pharmaceuticals and medicines sector fared much better hiring-wise, with its 1,500 net new jobs its best such performance since January’s 1,700. This improvement, plus positive revisions, brought employment in this sector 15.09 percent higher during the CCP Virus era and its continuing aftermath versus the 14.54 percent increase calculable last month.

And the pharmaceutical sub-sector that contains vaccines added 800 jobs for its best employment month since last June and its increase of 900. The workforce for these vital health security companies is now 20.61 percent larger than in February, 2020, just before the CCP Virus’ arrival in force, versus the 19.80 percent calculable last month.

To be sure, domestic manufacturing data has a habit of producing pleasant surprises. (See, e.g., the latest production figures.) But with the overall economy continuing to lose momentum, and the foreign markets that normally buy so many domestically manufactured products performing no better, any near-term improvement in U.S. manufacturing employment will be just that – a pleasant surprise.    

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(What’s Left of) Our Economy: A Longstanding U.S. Job Quality Problem is Returning

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Biden adminstration, Employment, healthcare services, Jobs, private sector, real private sector, subsidized private sector, {What's Left of) Our Economy

For all the buzz about continuingly strong U.S. job creation despite what seems to be an intensifying slowdown in economic growth, one troublesome trend has staged a comeback – involving the surging share of new jobs typically described as private sector that are nothing of the kind. Instead, as known by RealityChek regulars, they represent a separate grouping that I’ve called the “subsidized private sector” (SPS).

That is, they’re jobs in industries like healthcare services whose vibrancy – and therefore employment levels – are heavily dependent on government spending. That’s not to say that they’re less important to society or the economy than “Real Private Sector” (RPS) jobs. But they’re definitely different. And since nearly everyone would agree that the real private sector is the economy’s main source of innovation and productivity, it can’t be good news that so far in 2023, SPS jobs have recovered to their highest shares of recovery-era RPS job creation since the bubble decade expansion of 2001-2007.

Let’s begin our examination of the last few economic expansions (our focus, since figures from comparable periods of an economic cycle yield the most informative results) with that bubble decade recovery. During those half dozen years – which ended in the Global Financial Crisis and an economic downturn that at that point was America’s deepest since the Great Depression of the 1930s – SPS jobs accounted for nearly half of all private sector jobs created, and for slightly more than those (that is, more than 100 percent) added in the remaining RPS. No wonder growth then was so unhealthy.

The rebound following the Great Recession was the longest on record but historically weak growth-wise. During that July, 2009-February, 2020 span, the SPS represented just 23 percent of all new private sector (less than half the share of the bubble expansion) and 29.87 percent of the RPS jobs created (just a third of the bubble expansion share).

The current economic recovery began in June, 2020, and overall it’s been much less reliant on the SPS. From that point, till the latest (and still preliminary) April, 2023 official jobs report, SPS jobs amounted to only 14.39 percent of all PS jobs created, and 16.81 percent of RPS jobs.

But what a change has taken place this year! SPS jobs have bounced back up to 28.21 percent of all PS jobs, and 39.29 percent of all RPS jobs.

And although it’s never wise to make too much of one month’s worth of data (especially when it’s still preliminary), the numbers for last month show a major acceleration even from these levels. Just over one-third of all private sector hiring in April took place in the SPS, and that subsidized private sector employment increase stood at just over half of the RPS advance.

At the beginning of this year, the Biden administration insisted that its economic policies had given the nation “the two strongest years of job growth in history.” The renewed prominence of the subsidized private sector suggests that, going forward, he should start asking himself just where all those jobs are coming from.

(What’s Left of) Our Economy: U.S. Manufacturing Employment Keeps its Head Above Water

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aircraft, aircraft engine parts, aircraft engines, aircraft parts, appliances, automotive, CCP Virus, computer and electronics products, coronavirus, COVID 19, electrical equipment, electronic components, Employment, fabricated metal products, Jobs, Labor Department, machinery, manufacturing, non-farm payrolls, non-metallic mineral products, paper, phamaceuticals, semiconductors, transportation equipment, vaccines, {What's Left of) Our Economy

America’s domestic manufacturing delivered no fewer than two upside employment surprises in April, according to today’s latest U.S. Labor Department report. Despite persistent reports of U.S.-based industry’s mounting woes (here‘s one of the most recent), the sector added 11,000 jobs on net last month – not world-beating, but its best such performance since January’s identical number.

And revisions showed that the two-month employment losing streak manufacturing had experienced as of last month’s data…wasn’t. Specifically, February’s originally reported 4,000 monthly manufacturing headcount drop has now been revised to a gain – most recently of 3,000.

At the same time, the revisions were overall slightly negative, because of the downgrade of March’s results from a drop of 1,000 to one of 8,000. If that figure holds, it will represent the sector’s first setback since the 32,000 sequential nosedive in April, 2021 that stemmed largely from the automotive sector’s problems securing semiconductor supplies.

On the plus side, however, these manufacturing revisions weren’t nearly as bad as those for the previous two months revealed in the new report on “non-farm payrolls” (the Labor Department’s definition of the American jobs universe).

In fact, although the new data left domestic manufacturing as a national job-creation laggard, this status essentially stopped deteriorating in April.

Since February, 2020 – the last full data month before the CCP Virus pandemic began hammering and distorting the entire economy – manufacturing headcounts have risen by 1.61 percent. That’s a slight improvement over the 1.55 percent calculable from last month’s NFP release.

Total employment is now up 2.17 percent during this period, versus the 2,10 percent calculable last month. And the workforce for the private sector as a whole has grown by 2.78 percent, versus the 2.71 percent calculable last month.

Consequently, as of the the April results, manufacturing represented 8.35 percent of all NFP jobs – the same share calculable from the previous employment report but higher than the 8.39 percent it hit just before the pandemic’s arrival in force state-side. And it accounted for 9.76 percent of all private sector jobs – also the same as last month’s share but lower than the 9.87 percent from February, 2020. (The difference stems from still-depressed levels of public sector employment, which is part of that NFP category.)

April’s biggest jobs winners among the broadest manufacturing sub-sectors tracked by Washington were highly concentrated in a handful of industries:

>the big, diverse transportation equipment sector, which enjoyed its third straight month of strong job creation by boosting employment on month in April by 6,700. Payrolls in these companies are now up by 3.81 percent since immediately pre-pandemic-y February, 2020, versus the 3.33 percent calculable last month;

>fabricated metal products, another big sector, where the workforce expanded by 6,300 – its strongest such showing since February, 2022’s 6,900. Moreover, revisions were positive, including a February result initially reported as a drop of 1,100, then downgraded to one of 1,200, but now recorded as a gain of 300. This progress pulled fabicated metals payrolls from the 1.45 percent below their February, 2020 levels calculable last month to witin 0.94 percent; and

>computer and electronic products, where an increase of 3,200 workers was its best monthly performance since last October’s 3,300. Employment in these industries has now advanced by 1.95 percent during the (ongoing) CCP Virus period, versus the 1.70 percent calculable as of last month.

April’s biggest losers among these broad groupings were:

>paper manufacturing, which lost 2,700 employees in its worst such performance since the 4,600 fall-off two Aprils ago. Now down 2.62 percent versus 1.29 calculable last month.

>electrical equipment, appliance, and components, where cuts of 2,600 jobs were made for the second straight month. This loss dragged this grouping’s post-February, 2020 head count gains down to 0.98 percent from the 1.71 percent calculable last month; and

>non-metallic mineral products, where a sequential employment decline of 2,300 represented both the third monthly drop in a row and the biggest since March, 2022’s 5,000. Payrolls in this sector are now 2.19 percent above their immediate pre-pandemic level, versus the 2.81 percent improvement calculable last month.

RealityChek has tracked two industries consistently since the virus began destabilizing the U.S. economy: machinery, because its products are used so widely throughout manufacturing and non-manufacturing sectors that it’s a good barometer of industry’s health; and automotive, because its fortunes have so often and so heavily influenced determined those of manufacturing as a whole during the pandemic period.

As a result, the former’s weak April job growth of 200 wasn’t especially good news. Nor was the sharp downward revision of March’s initially reported 3,800 increase (which had been the biggest since November’s 5,800) to just 1,900. Due to these results, machinery’s employment is up just 1.24 percent since the last pre-pandemic full data month of February, 2020 versus the 1.55 percent calculable last month.

By contrast, vehicle and parts makers added 5,800 new workers in April, extended a string of hiring gains to four months, and turned in their best performance since December’s 9,500 binge. Revisions, moreover, were strongly positive, including a February upgrade from an initially reported increase of 200 to one of 1,300 to one of 3,800. These improvements brought automotive’s post-February, 2020 employment increase up to 7.18 percent from the 6.45 percent calculable last month.

RealityChek has also been monitoring 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 aemployment performances (in March) were overall moderately positive.

Although U.S.-based semiconductor companies and their foreign counterparts are slated to receive major government funding to foster domestic production, the sector is now experiencing a global glut for most customer industries. Perhaps that’s why February’s unrevised employment loss of 600 for the semiconductors and related devices category was followed by a gain of only 300 in March – and why this increase was only the first monthly advance since December.

Payrolls in this sector are now up 9.28 percent since just before the pandemic’s arrival in force, versus the 10.20 percent calculable last month.

In aircaft manufacturing, which was damaged by pandemic-era travel curbs and Boeing’s production woes, a strong employment comeback came to a halt in March. Indeed, the month’s drop of 700 was the first such retreat since the 300 jobs shed in January, 2022. Further, February’s initially reported 1,300 hiring burst has been revised down to one of 1,100.

Even so, the aircraft workforce is still just 3.29 percent smaller than in February, 2020, versus the 2.91 percent calculable last month.

Hiring by aircraft engines and engine parts-makers, however, jumped by 1,000 in March – their best such performance since they added 4,800 employees in May, 2020, as they tried to rebound from the devastating first wave of the CCP Virus pandemic. February’s initially reported gain of 900 was downgraded to one of 600, but these companies’ payrolls have now recovered to 6.33 percent below their immediate pre-pandemic total, versus the 7.10 percent shortfall calculable last month.

Non-engine aircraft parts jobs climbed by 600 in March, their fourth straight advance. A stretch that long hasn’t been achieved since these businesses boosted their workforces for six consecutive months between January and June, 2019. Due to these increases, non-engine aircraft jobs are now 14.62 percent fewer than in February, 2020, versus the 15.44 percent gap calculable last month.

As for surgical appliances- and supplies-makers, who turned out many of the products used to fight the virus, their employment remained flat in March. Consequently, their workforces remained 1.23 percent larger than just before the pandemic.

The 400-job gain by the pharmaceuticals and medicines sector pushed their CCP Vius employment growth up to 14.54 percent, versus the 14.41 percent calculable last month.

The pharmaceutical sub-sector that contains vaccines lost 300 jobs in March, but its initially reported February rise of 300 has been revised up to one of 400. Its employee count is now 19.80 percent higher than in immediately pre-pandemic-y February, 2020, versus the 19.90 percent calculable last month.

In the middle of last month, I concluded that the latest official figures on manufacturing output showed the sector to be “spinning its wheels.” These new manufacturing employment numbers seem to be sending the same message – and as with the production data, indicate that industry’s future, like that of the rest of the economy, depending on the fate of domestic demand – and in turn on whether the Federal Reserve will chicken out from its growth-slowing inflation-fighting strategy, and whether and the extent to which politicians will succumb to their traditional temptation to keep voters’ economically happy with robust spending programs, major tax cuts, or some combination of the two.

Im-Politic: Where America’s Schools are Best in Fostering Employment

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economy, education, Employment, Im-Politic, Jobs, public schools, schools, state and local government, students, teachers

So it turns out that America’s public school systems have been excelling on the employment front after all. Only their perfomance has nothing to do with their effectiveness at equipping students with the knowledge and skills needed for successful careers. Instead, it has to do with their effectiveness in creating jobs in public school systems – and specifically, growing employment much faster than public school enrollment has increased.

And although most education specialists believe (understandably, IMO), that the lower student-teacher ratios get, the more the former learn, widely accepted measures of student performance show that this relatively rapid expansion of public school system employees has achieved nothing of the kind.

That may be because teachers are getting worse (or at least less capable of teaching today’s students), or because too many of the new workers in school systems are doing something other than classroom teaching. The (official) data I present below doesn’t distinguish between types of public education jobs, and which types have risen faster than others. 

The big picture, though, should worry anyone concerned about lagging public school performance: From 1980 through 2020, according to the U.S. Department of Education, the numbers of students in the nation’s primary and secondary schools were up by 22.16 percent – from 40.877 million to 49.375 million.

But the Labor Department figures peg the expansion of employment in “local education” during that period at 58.77 percent – from 5.073 million to 8.054 million. That’s nearly three times as fast.

And the disparity between the two growth rates has been pretty remarkable during some timeframes. For example, between 1980 and 1990, public school enrollment inched up by just 0.83 percent. But local education employment jumped by 15.45 percent.

Between 1991 and 2001 (generally the years of that decade’s economic recovery), public school enrollment grew by 12.26 percent. But local education systems added 24.29 percent more workers. That’s nearly twice as many.

As made clear by the Bloomberg piece that sparked my curiosity about the trends, the CCP Virus pandemic brought these trends to a screeching halt. Thanks to extended school closings, their aftermath, and other Covid-driven changes in the U.S. employment picture, between 2020 and last year, even though public school enrollment expanded by 1.13 percent, the local education workforce actually shrank by 3.66 percent.

More recently, local education payrolls have rebounded, and as Bloomberg‘s Nic Querolo reports, have almost returned to their pre-pandemic levels. And because municipal finances overall are in unexpectedly excellent shape for now, state and local governments may well be able to boost education headcounts further.

But will public school enrollment keep growing as quickly? (No figures for this year are available yet.) Will the result (finally) be better educational outcomes? Will state and local governments and taxpayers care enough to start changing what seems to be a losing game for students and the country in general? I’ll be eagerly anticipating the full year 2023 enrollment and local education employment data for further insights. 

(What’s Left of) Our Economy: U.S. Manufacturing Starts a Jobs Losing Streak

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aircraft, aircraft engines, aircraft parts, automotive, banking crisis, Boeing, CCP Virus, chemicals, coronavirus, COVID 19, credit, Employment, fabricated metal products, food manufacturing, Jobs, machinery, manufacturing, metals, non-farm jobs, non-metallic mineral products, pharmaceuticals, plastics and rubber products, private sector, recession, semiconductors, soft landing, stimulus, surgical equipment, transportation equipment, vaccines, {What's Left of) Our Economy

U.S. manufacturing employment achieved a bad type of milestone in March, according to the official jobs data released today: Reflecting weakness in domestic industry, for the first time since the peak pandemic period of early spring, 2020, job levels fell for the second straight month.

The sequential decline was small – just 1,000. And the February dip was actually revised up from one of 4,000 to one of 1,000. But back-to-back losses of any kind haven’t been recorded since the CCP Virus began decimating the U.S. economy in March and April of 2020. Moreover, January’s modest monthly gain was downgraded a second time – from 13,000 to 11,000.

Because of these losses, and continuing economy-wide jobs gains, the March results worsened manufacturing’s status as an employment laggard since the pandemic’s arrival in force. Its payrolls have now risen by just 1.55 percent since February, 2020 – the last data month before the virus’ full economic effects began to be felt. That’s the same as the growth calculable from the previous jobs report.

For non-farm jobs overall (the federal government’s definition of the U.S. jobs universe), employment now stands 2.10 percent higher than in February, 2020, versus the 1.96 percent calculable from last month’s jobs report. And private sector employment is now up 2.71 percent during this period, versus the 2.46 percent calculable last month.

From another perspective, manufacturing jobs have dropped to 8.35 percent of total non-farm jobs – below the 8.36 percent calculable from last month’s release and the 8.39 percent level just before the CCP Virus’ arrival state-side in force. And they now account for just 9.76 percent of all private sector jobs, versus the 9.77 percent calculable from last month’s release and the immediate pre-pandemic share of 9.87 percent.

March’s biggest jobs winners among the broadest manufacturing sub-sectors tracked by Washington were:

>transportation equipment, a big, diverse grouping that added 6,400 positions. Moreover, this advance followed an upwardly revised 2,500 increase for February. Transportation equipment payrolls are now up 3.33 percent since immediately pre-pandemic-y February, 2020, versus the 2.82 percent calculable from last month’s jobs report;

>machinery, another broad category whose 3,800 employment monthly growth was encouraging 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. In addition, this headcount expansion was the tenth in a row,and the March advance was the biggest since November’s 5,800 .

February’s initially reported 400 employment bump was revised down to 200, but machinery’s workforce is now 1.55 percent larger than in February, 2020, versus the 1.13 percent calculable last month;.

>food manufacturing, another big industry that added 3,400 workers and saw its initially reported 1,100 February employment drop revised up to a 1,400 improvement. Food manufacturing’s payrolls are now 4.52 percent greater than just prior to the pandemic’s arrival, versus the 4.26 percent calculable last month; and

>primary metal, a smallish sector that boosted employment by 1,800 in its best performance since last July’s 1,900. Just as good: It’s initially reported jobs cuts of 400 in February are now estimated at an increase of 300.

March’s biggest losers among the broad industry categories were:

>fabricated metal products, a big sector whose 4,100 contraction represented its second straight month in the red after 23 months of expansion, and its worst such performance since the 18,400 nosedive of July, 2020 – when the economy was recovering from the devastating first wave of the CCP Virus. Worse, February’s initially reported jobs decline of 1,100 was downgraded to one of 1,200.

Due to these dreary results, fabricated metals jobs have now shrunk by 1.45 percent since just before the pandemic and consequent lockdowns and voluntary behavioral curbs began kneecapping the economy in Febuary, 2020. As of last month’s jobs report, this figure stood at 1.15 percent;

>chemicals, another sizable industry, where 4,000 workers lost jobs – the worst such performance since December’s 5,900 plunge. February’s initially reported 2,500 employment growth was revised up to 2,900, but since just before the pandemic’s arrival in the United States in force, chemicals makers’ payrolls are now 6.96 percent higher, versus the 7.40 percent calculable last month.

>non-metallic mineral products, which saw a fall-off of 2,200 positions in its worst employment month since last month, when it shed 5,000 jobs. In addition, February’s initially reported jobs increase of 1,500 has been revised way down to one of 200.

These setbacks have depressed this small sector’s post-February, 2020 job growth from the 3.74 percent calculable last month to 2.81 percent; and .

>plastics and rubber products, a medium-sized category where 2,200 workers were let go. February’s initially reported 4,700 employment tumble was revised down to one of 4,400. But head counts in thse sectors are now 2.66 percent greater than just before the CCP Virus’ arrival in force, versus the 2.99 percent calculable last month.

Aside from machinery, RealityChek has been tracking employment in automotive manufacturing because of its special importance to industry overall and the economy in general.

Vehicle- and parts-makers boosted employment in March by 3,700, and February’s initially reported increase of 200 was upgraded all the way up to one of 1,300. These advances pushed automotive’s post-February, 2020 payrolls improvement from the 5.91 percent calculable last month to 6.45 percent.

RealityChek has also been monitoring 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.

Although global semiconductor supplies in general are no longer in shortage, supply problems continue dogging certain industries (see, e.g., here), and of course Washington has now approved major long-term funding to boost output in the United States.

So it’s more than a little interesting that employment in the “semiconductors and related devices” category slipped by 600 in February for its second straight monthly fall-off. Moreover, that January decrease of 200 was initially reported as an increase of 300.

Consequently, the workforce in this sector is now 10.20 percent bigger than in immediately pre-pandemic-y February, 2020, versus the 10.79 percent calculable last month.

In aircaft manufacturing, which was damaged by pandemic-era travel curbs and Boeing’s production woes, a strong employment comeback continued in February. Companies in this industry added 1,300 employees that month. With,January’s 400 increase staying unrevised, aircraft employment closed to within 2.92 percent of its February, 2020 level, versus the 3.45 percent gap calculable last month.

The head count in aircraft engines and engine parts-makers surged by 900 in February, in those companies’ best such performance since last July’s identical number. January’s initally reported increase of 100 jobs is now revised down to no change, but payrolls in this sector are now just 7.10 percent off their immediate pre-pandemic levels, versus the 7.97 percent calculable last month.

Non-engine aircraft parts jobs jumped by 1,300 – the best such performance since last January’s 1,400. This past January’s initially reported gain of 100 was unrevised, leaving employment in these businesses off by 15.44 percent since just before the pandemic’s February, 2020 arrival in force. As of last month’s jobs report, the shortfall was 16.44 percent.

Surgical appliances- and supplies-makers turn out many of the products used to fight the pandemic, and their workforce expanded by 200 in February – their best such performance since last August’s 800. January’s initially reported gain of 100 was unrevised, too, leaving employment levels a surprisingly low 1.23 percent above immediate pre-pandemic levels, versus the 1.14 calculable last month.

Pharmaceuticals and medicines companies shed 300 jobs in February, but that retreat followed January net hiring that was revised down only from 1,800 to 1,700. These changes pushed post-February, 2020 employment growth in these industries down from 14.54 percent to a still healthy 14.41 percent.

The pharmaceutical sub-sector that contains vaccines added 300 jobs in February, its best such performance since its gain of 600 last October. January’s initially reported 100 employment decline was revised down to decrease of 300, leaving its workforce twenty percent greater than in immediately pre-pandemic-y February, 2020, versus the 19.90 percent calculable last month.

At this point, I’d expect manufacturing’s current hiring woes to ease before too long, mainly because I continue doubting that American politicians or central bankers will permit the economy to fall into major recession (or even slow down much further) as a new presidential election approaches, and because a post-pandemic rebound in civilian aircraft demand is already hiking production at Boeing and its vast supply chain. Pressures to increase defense budgets further, and significant federal support for infrastructure building and repair, and semiconductor output will help, too. 

Headwinds aren’t completely gone – mainly the possibility that hopes for an economic soft-landing prove naive (perhaps because of a banking turmoil-spurred credit crunch), and ongoing weakness in the foreign markets to which U.S. industry exports.  But at the very least, so far they seem no match for the stimulative gusts we can expect from American politics.        

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

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aircraft, aircraft engines, aircraft parts, apparel, automotive, CCP Virus, chemicals, computer and electronics products, coronavirus, COVID 19, Employment, furniture, Jobs, machinery, manufacturing, non-farm jobs, non-metallic mineral products, pharmaceuticals, plastics and rubber products, private sector, semiconductors, surgical equipment, textiles, vaccines, {What's Left of) Our Economy

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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aircraft, aircraft engines, aircraft parts, automotive, CCP Virus, chemicals, computer and electronics products, coronavirus, COVID 19, Employment, fabricated metal product, Federal Reserve, food manufacturing, inflation, Jobs, machinery, manufacturing, medicines, non-farm payrolls, non-metallic mineral products, pharmaceuticals, private sector, recession, semiconductors, surgical equipment, transportation equipment, vaccines, {What's Left of) Our Economy

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: Job Creation in America’s Genuine Private Sector Has Weakened Markedly

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Employment, healthcare services, Jobs, private sector, real private sector, subsidized private sector, {What's Left of) Our Economy

Year-end data are often the gifts that keep on giving for anyone following the economy, and last Friday’s official monthly U.S. employment report (for December) turned up another one on top of the manufacturing figures I posted on yesterday – further confirmation that job creation in the private sector has slowed significantly, and that a surging share of this hiring doesn’t deserve the “private sector” label.

Instead, these jobs have come in industries heavily dependent on government spending – especially in healthcare services, which are of course massively subsdized by progams such as Medicare and Medicaid.

And their resurgence in relative terms reveals one way in which the U.S. labor market is returning to a pre-CCP Virus – and troubling – normal.

This “subsidized private sector”(SPS) of course mostly serves vital social purposes (though questions can certainly be raised about the importance of the the for-profit educational institutions and social service agencies also included in this category). But since productivity and innovation in this part of the economy is undoubtedly lower than in the “real private sector” (RPS), its increasing prominence in the national employment picture could weaken the country’s ability to raise living standards on a sustainable (as opposed to bubble-ized) basis.

One of the most eye-popping examples of this trend took place in the most recent revision of the November statistics. As reported last month, the initial November figures pegged total private sector job creation as up by 221,000 on month – among the year’s lowest increases. SPS hiring for the month amounted to 37.10 percent of this total, and just under 60 percent of the workers added in the RPS. Those were the highest such shares going back to January, 2021, by which time the worst of the distortions wreaked by the CCPVirus on labor markets and the rest of the economy (including of course in health care) clearly had passed.

But those revisions! Last Friday’s release estimated that the overall private sector boosted employment by just 202,000 – the worst such performance since the 108,00 loss of December, 2020. But SPS jobs as a share of total private sector job growth was upgraded to 44.55 percent, and the new SPS positions jumped to 80.36 percent of RPS number.

In December, at least preliminarily, total private sector hiring rebounded to 220,000. Moreover, the SPS employment advance for the month dropped to 35.45 percent of private sector job creation and 54.93 percent of the RPS gain. But those last two percentages were still the second highest since te beginning of 2021.

The longer term figures show that much more clearly how powerful this trend has become. During the first six months of last year, here’s how many net new jobs the private sector (PS), the SPS, and the real private sector created:

PS: 2.626 million

SPS: 0.599 million

RPS: 2.027 million

The absolute totals for the second half of 2022?

PS: 1.577 million

SPS: 0.531 million

RPS: 1.046 million

So although hiring slowed substantially in the second half, the biggest decreases by far came in the PS and the RPS. The SPS held up impressively.

Put differently, in the first half of the year, SPS employment advances came to 22.81 percent of overall PS gains and 29.55 percent of the RPS increases. In the second half of the year, these figures jumped to 33.67 percent and 50.76 percent (i.e., more than half).

A similar story emerges from examining the full-year results for the last two years. Here are the numbers on net new hiring in 2021:

PS: 6.293 million

SPS: 0.589 million

RPS: 5.704 million

And for 2022:

PS: 4.203 million

SPS: 0.949 million

RPS: 3.254 million

In percentage terms, in 2021, the SPS accounted for 9.36 percent of all private sector jobs created, and 10.33 percent of the RPS total. In 2022, these figures climbed to 22.58 percent and 29.16 percent, respectively. So the subsidized private sector share of private sector employment increases more than doubled between 2021 and last year, and its share of the real private sector’s increases nearly tripled.

This SPS strong relative employment expansion indicates that the slump it experienced once the CCP Virus arrived in the United States in early 2020 is coming to an end. That Febuary – the last full data month before the pandemic began roiling the economy and the rest of American life – the SPS’ share of total private sector jobs stood at 18.98 percent and of RPS jobs at 23.84 percent.

Both figures slipped during the pandemic, (see, e.g., here) but now they’re back to 18.96 percent and 23.39 percent – resuming a much longer term pattern. That is, the economy may be returning to a state in which the SPS – and especially the healthcare services sector – is eating the job market once again.

(What’s Left of) Our Economy: 2022’s U.S. Manufacturing Employment Winners and Losers

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automotive, durable goods, Employment, Federal Reserve, inflation, Jobs, manufacturing, nondurable goods, nonfarm jobs, private sector, recession, soft landing, {What's Left of) Our Economy

The release last Friday of the December official U.S. jobs report enables students of the economy to examine developments over the last full year, and that includes the biggest employment winners and losers in domestic manufacturing.  (Here‘s my analysis on the latest monthly manufacturing jobs data.) 

Below are the results for the broadest manufacturing categories tracked by the government, along with the durable and nondurable goods super-categories, both in absolute terms and in relative (percentage) terms. Because its fortunes have so strongly influenced those of all domestic industry, the data for the narower automotive sector will be presented as well.

(As known by RealityChek regulars, the numbers for other narrower sectors of special importance since the CCP Virus arrived stateside in force, like certain medical equipment and pharmaceuticals and semiconductors, are always one month behind. So year-on-year changes for full year 2022 won’t be available until next month.)

As with all U.S. government data, the figures below will be revised several times more. But unless the upgrades and downgrades are enormous, the year will have been marked by several important trends and comparisons with the 2021 data. In particular:

>manufacturing employment from December, 2021 through December, 2022 grew by exactly the same percent (3.02) as employment in the non-farm economy as a whole – the government’s definition of the entire economy;

>between December, 2020 and December, 2021, manufacturing job creation trailed hiring in the non-farm economy by 4.73 percent to 2.99 percent;

>between December, 2021 and December, 2022, head counts in the private sector as a whole expanded by 3.31 percent – also faster than manufacturing’s pace – but that result represented a smaller margin versus manufacturing than in 2021, when private sector payrolls expanded by 5.21 percent;

>in 2022, payrolls increased faster in durable goods (3.29 percent) than in nondurable goods (2.57 percent);

>in 2021, the durable goods edge was a smaller 3.11 percent versus 2.80 percent; 

>on a percentage basis, 2022 manufacturing job growth was broad-based. Of the 20 broad industry groupings tracked by the federal government, 15 generated additional hires and ten boosted their workforces by between two and four percent; and

>2021’s manufacturing employment increases were even broader based, however, as only the petroleum and coal products sector cut jobs.  But the spread among sectors was greater, as only eight fell into the two-four percent growth range.   

And now, the absolute yearly changes in manufacturing employment in 2022 and 2021, with the former listed in order from best performance to worst:

                                                                       2022                    2021

manufacturing total                                     379,000               365,000

durable goods                                              257,000               236,000

nondurable goods                                        122,000               129,000

transportation equipment                               90,800                 50,400

food manufacturing                                       59,100                  29,200

fabricated metal products                              43,900                  46,000

machinery                                                      41,000                  27,500

chemicals                                                       31,000                  26,300

computer & electronics products                   30,200                  14,600

miscellaneous nondurable goods                   18,400                  40,300

plastics & rubber products                             16,700                  20,100

miscellaneous durable goods                         15,600                  31,700

wood products                                                12,000                  16,900

non-metallic mineral products                       14,200                    3,300

primary metals                                                 9,900                  11,600

electrical equipment & appliances                   7,500                 17,500

paper & paper products                                    5,200                      800

printing & related support activities                   300                   7,000

apparel                                                               -300                   2,100

petroleum & coal products                             -1,600                  -4,400

textile mills                                                     -3,400                   3,900

textile product mills                                        -3,500                   4,000

furniture & related products                            -8,000                15,600

20-21 absolute changes

And here are those percentage changes, with the 2022 results again listed from best performance to worst:

                                                                           2022                   2021

manufacturing total                                            3.02                    2.99

durable goods                                                     3.29                    3.11

nondurable goods                                               2.57                    2.80

transportation equipment                                   5.43                     3.11

miscellaneous nondurable goods                       5.42                  13.46

machinery                                                          3.84                    2.64

food manufacturing                                           3.56 `                  1.79

chemicals                                                           3.53                    3.09

non-metallic mineral products                           3.48                    0.81

fabricated metal products                                   3.11                   3.37

wood products                                                    2.87                   4.21

computer & electronics products                       2.83                   1.39

primary metals                                                   2.78                   3.36

miscellaneous durable goods                             2.49                   5.33

plastics & rubber products                                 2.21                   2.82

electrical equipment & appliances                     1.86                   4.55

paper & paper products                                      1.48                   0.23

printing & related support activities                   0.08                   1.91

apparel                                                               -0.32                   2.28

petroleum & coal products                                -1.52                  -4.01

furniture & related products                              -2.09                   4.24

textile product mills                                           -3.32                   3.94

textile mills                                                        -3.39                   4.05

As for the automotive sector, which is placed within the broader transportation equipment category, it added 54,200 workers in 2022, a 5.50 percent advance. So among the above industries, on a percentage basis, it takes the job creation crown for industry during the past year.  Vehicle and parts makers enjoyed a strong 2021 employment-wise, too, enlarging their workforce by 4.05 percent, or 38,300.

A final noteworthy point: Manufacturing’s hiring performance doesn’t seem to have been strongly related to its production growth. In 2021, when industry’s payrolls expanded by 2.99 percent, its inflation adjusted output rose by 4.19 percent. But last year, when manufacturers upped their headcounts by 3.02 percent, their real production annual growth (through November – the lastest data available) slowed to 1.40 percent.

This year, the economy could well tip into recession, or perhaps at best achieve the “soft landing” sought by the Federal Reserve in its fight against inflation. In other words, U.S.-based manufacturers could well face a new test of the growth and hiring resilience they’ve shown so far since the pandemic’s arrival.            

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

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aerospace, aircraft, aircraft engines, aircraft parts, automotive, CCP Virus, chemicals, coronavirus, COVID 19, Employment, fabricated metal products, food products, furniture, Jobs, machinery, manufacturing, non-metallic mineral products, petroleum and coal products, pharmaceuticals, semiconductors, surgical equipment, transportation equipment, vaccines, {What's Left of) Our Economy

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.