The new October employment data made clear that manufacturing payrolls are already recovering from hurricane damage earlier this fall, and held up somewhat better during the storms than initially reported. Industry jobs grew sequentially by a net of 24,000 in October, and September’s 1,000 employment loss was revised up to a 6,000 increase. Even some sectors seemingly hardest hit by violent weather lost fewer jobs than first estimated, including chemicals (1,900 rather than 2,000), automotive (2,500 rather than 3,200), and printing and related activities (3,600 to 2,800).
October’s monthly manufacturing wage performance (a 0.19 percent improvement) topped that of the private sector overall (where wages dipped sequentially by 0.04 percent), but the pay gap between the two widened again year-on-year.
Jobs revisions revealed that August’s 44,000 manufacturing jobs gain was the best monthly total since August, 1998’s 141,000. Industry’s total employment rebound since recession lows passed the one million mark (1.028 million). Moreover, its year-on-year jobs increase (156,000) was the best such total since July, 2015’s 168,000. At the same time, a technical recession in net new automotive job creation dragged into its eighteenth month, and manufacturing’s share of total employment, though stabilizing, remained near historic lows.
Here’s my analysis of the latest monthly (October) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>U.S. domestic manufacturing employment fared better during the hurricane-swamped month of September than originally judged, and turned in a strong October, according to the Labor Department’s latest read on the national employment scene.
>Industry added 24,000 net new workers on month in October, according to the Labor Department, and September’s hurricane-affected 1,000 decline in payrolls was revised to a 6,000 job gain.
>The revisions in large part reflected more resilience than first recognized in sectors that apparently took especially hard hits from the storms.
>In particular, the chemicals industry’s September job losses were revised down from 2,000 to 1,900, and in October, the gigantic sector boosted employment by 3,600.
>Similarly, the automotive sector is now judged to have lost 2,500 net jobs in September, not 3,200, and it added 2,400 more in October.
>For printing and related support activities, September’s net job losses are now pegged at 2,800, not 3,600. Its employment levels remained unchanged in October.
>Other sectors whose geography made them seem highly vulnerable to the hurricanes saw their September job losses revised up slightly (notably apparel, and petroleum and coal products). But the changes were marginal.
>Manufacturing wages performed well in October, too, relatively speaking. They advanced by 0.19 percent sequentially before factoring in inflation – as overall hourly private sector pay dipped by 0.04 percent.
>On a longer term basis, however, manufacturing remains a wage laggard. Its October year-on-year pre-inflation wage increase of 1.59 percent significantly trailed the overall private sector’s 2.43 percent.
>This annual rise for manufacturing, moreover, was less than half that achieved between the previous Octobers: 3.54 percent.
>In fact, the current-dollar wage gap between manufacturing and the overall private sector has widened over the last year. Between the mid-2009 beginning of the current economic recovery through this October, pre-inflation private sector wages had risen 21.73 percent faster than their manufacturing counterparts. As of the previous October, the gap was only 17.34 percent.
>Included in the manufacturing jobs revisions was an upgrade for August’s monthly total (from 41,000 to 44,000) that represented the best such performance since August, 1998’s 141,000.
>The latest August payroll rise was all the more impressive for not having followed a major July monthly fall-off. Before that August, 1998 manufacturing job surge, 186,000 jobs in industry had been lost on net the previous month.
>Manufacturing employment also registered noteworthy annual gains. Since last October, its payrolls have expanded by 156,000 – the best such increase since July, 2015’s 168,000. Between the previous Octobers, manufacturing had actually lost 18,000 jobs on net.
>In another positive milestone, the number of jobs recreated in manufacturing since its post-recession employment low point in February and March, 2010 finally passed the one million mark. As of October, 1.028 million of the 2.293 million net jobs lost by manufacturing during the recession and its aftermath have been regained (44.83 percent).
>Nonetheless, manufacturing still lags the rest of the economy employment-wise. In particular, since its bottom (February, 2010), the private sector overall has boosted employment by 17.392 million jobs. That’s nearly twice as many positions as it lost (8.780 million) during the recession and its aftermath.
>In addition, manufacturing employment remains 9.20 percent (or 1.265 million jobs) lower than when that recession began at the end of 2007.
>During the same period, private sector employment has grown by 7.42 percent (or 8.612 million jobs).
>In one discouraging development, a technical recession in automotive job creation (a cumulative decline of two straight quarters of more), continued into its eighteenth month in October. Since April, 2016, employment in this crucial sector is down by 700.
>Somewhat more encouragingly, manufacturing jobs as a share of total non-farm jobs (the Bureau of Labor Statistics’ American jobs universe), has stabilized for now. But the level — just under 8.49 percent — is close to historic lows.
>The latest inflation-adjusted wage data for manufacturing and overall private sector wages go through September, and paint a pay picture comparable to that created by the pre-inflation data.
>Real manufacturing wages were flat on month in September – by no means good, but better than the private sector’s 0.09 percent decrease. At least the August manufacturing inflation-adjusted wage plunge was pegged at 0.82 percent, not 0.91 percent.
>But since the current recovery began – more than eight years ago – whereas after-inflation manufacturing wages have improved by only 1.21 percent, overall private sector wages are up 4.46 percent.