(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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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aircraft, aircraft engines, aircraft parts, chemicals, computer and electronics products, dollar, Employment, exchange rates, exports, fabricated metal products, Federal Reserve, food products, inflation, Jobs, machinery, manufacturing, non-metallic mineral products, pharmaceuticals, recession, semiconductors, surgical equipment, textile product mills, vaccines, {What's Left of) Our Economy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(What’s Left of) Our Economy: U.S.-Based Manufacturing Returns to Pre-Pandemic Job Levels

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aerospace, aircraft, aircraft engines, aircraft parts, Bureau of Labor Statistics, CCP Virus, coronavirus, COVID 19, Employment, fabricated metal products, Federal Reserve, food products, inflation, Jobs, Labor Department, machinery, manufacturing, miscellaneous non-durable goods, monetary policy, non-farm jobs, non-farm payrolls, personal protective equipment, pharmaceuticals, PPE, printing, private sector, recession, semiconductors, supply chain, surgical equipment, textiles, transportation equipment, vaccines, {What's Left of) Our Economy

A power outage in my Maryland suburb of Washington, D.C. prevented me from filing my usual same-day post on the manufacturing highlights of the latest official U.S. jobs release, but the big news is still eminently worth reporting:

Specifically, “It’s back.” According to yesterday’s employment report from the Labor Department (for June), as was the case with the private sector overall, U.S.-based manufacturing last month finally regained all the jobs it lost – and then some – during the deep but short CCP Virus- and lockdowns-induced recession of spring, 2020.

The new figures show that by adding 29,000 workers on net sequentially during June, and having added slightly more to their headcounts in April than previously reported, domestic industry’s employment last month stood at 12.797 million. That’s 0.09 percent more than the 12.785 million on their payrolls in February, 2020, the last full data month before the pandemic’s arrival in force began decimating and distorting the economy.

As of June, American private sector workers now number 129.765 million – 0.11 percent above its immediate pre-pandemic level of 129.625 million.

Yet the entire non-farm economy (the employment universe of the Labor Department’s Bureau of Labor Statistics, which tracks employment trends for the federal government) still hasn’t recovered all the jobs it lost during March and April, 2020. Because public sector employment is still off some, June’s 151.980 million non-farm payroll count remains 2.38 percent below the February, 2020 total of 152.504 million.

The June jobs report left manufacturing employment at the same level of total non-farm employment (8.42 percent) as in May, and a slightly smaller (9.86 percent versus 9.87 percent) share of total pivate sector employment that month.

But since the CCP Virus’ large-scale arrival, domestic industry has boosted these percentages from 8.38 percent and 9.83 percent, respectively.

Another reason for optimism about the manufacturing results of the June jobs report: The 29,000 payrolls boost was a nice increase from May’s unrevised 18,000 increase – the worst monthly performance since April, 2021’s 28,000. And as noted above, this past April’s excellent results saw their second upward revision – from 58,000 to 61,000 (the highest month-to-month gain since last July’s 62,000).

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

>transportation equipment, which has been on a genuine rollercoaster. June’s hiring increase of 7,200 followed a May loss revised down from 7,900 to 9,800 – the worst such monthly drop since February’s 19,900. Yet the April figure for the sector was upgraded from an unrevised 19,500 to 20,100 – and followed a March advance of 25,000. That was the best such performance since October’s 28,200.

Yet all this tumult – due largely to an ongoing semiconductor shortage still plaguing the automotive sector in particular – still left transportation equipment employment 2.23 percent lower than in immediately pre-pandemic-y February, 2020 – as opposed to the 2.57 percent figure calculable last month;

>miscellaneous non-durable goods, where headcounts improved by 5,400 – the biggest monthly increase since February, 2021’s 5,500. But volatility is evident here, too, as May’s previously reported 2,900 jobs decrease was revised downgraded 3,400 – the biggest decline since December, 2020’s -9,400. Yet payrolls in this catch-all sector are now 9.68 percent higher than in February, 2020 – up from the 8.12 percent calculable from last month’s figures;

>plastics and rubber products, whose 5,300 hiring advance was its best since April’s now twice upgraded 8,000 rise. Moreover, May’s initially reported jobs decrease of 400 is now judged to have been a gain of 2,600. These companies now employ 4.33 percent more workers than just before the pandemic’s large-scale arrival in February, 2020, versus the 2.88 percent calculable last month; and

>food manufacturing, which added 4,800 employees on month in June. In addition, May’s initially reported 6,100 increase was revised up to 7,600, more than offsetting a second downgrade of the April advance from 7,700 0 7,100. This huge industry’s workforce is now 2.87 percent greater than in February, 2020, as opposed to the 2.53 percent figure calculable last month.

The biggest jobs losers in June among the broadest manufacturing sectors were:

>printing and related support activities, where 900 jobs were cut in the biggest monthly decrease since January’s 1,800. Worse, May’s initially reported employment retreat of 400 is now estimated at 700, and April’s upgraded increase (of 3,100) was revised down to 3,900. Employment by these companies is now down by 10.63 percent since just before the CCP Virus’ arrival in force in February, 2020, versus the 10.23 percent calculable last month;

>textile product mills, whose sequential June jobs loss of 700 was its worst since last September’s 900. May’s initially reported 100 employment dip stayed unrevised, but April’s initially upgraded results (from a headcount loss of 400 to one of 300) is now judged to be a decline of 400 once again. Consequently, payrolls in this sector are now off by 5.32 percent since February, 2020, as opposed t the 4.60 percent calculable last month; and

>fabricated metal products, whose 600 job loss in June was its worst such retreat since April, 2021’s 1,600, and the first fall-off since then. Revisions were mixed, with May’s initially reported increase of 7,100 downgraded to 6,900 (still its best sequential performance since February’s 9,300 surge) but April’s losses were revised down again, from 1,600 to 1,400. Despite its recent hiring hot streak, however, payrolls in this large sector are still 2.31 percent below pre-pandemic-y February, 2020’s level, versus the 2.24 percent calculable last month.

As known by RealityChek regulars, the big machinery industry is a bellwether for all of domestic manufacturing and indeed the entire U.S. economy, since so many industries use its products. So it was definitely good news that employment in this sector rose on month in June by 1,000 after having dropped by a downwardly adjusted 3,200 in May. That’s the sector’s worst such performance since it shed 7,000 workers last November. (Note: Last month, I mistakenly reported the May, 2021 decrease at 7,900.)

Yet April’s hiring gains were revised down again – from 5,900 to 5,800 – and machinery employment is still off since just before the pandemic’s arrival by 2.05 percent, versus the 2.12 percent calculable last month.

As always, the most detailed employment data for pandemic-related industries are one month behind those in the broader categories, and interestingly, their May performance was generally better than that for domestic industry as a whole.

The semiconductor industry still struggling with the aforementioned shortages boosted employment on month in May by 800, and April’s initially reported 900 increase was revised up to 1,100 – the best since December’s 1,400. Even though March’s jobs improvement remained at a downgraded 400, payrolls in the sector moved up to 2.20 percent higher than just before the pandemic arrived in February, 2020 from the 1.66 percent calculable last month. And although progress seems modest, it must be remembered that even during the early spring, 2020 downturn, these companies added to their headcounts.

In surgical appliances and supplies (which includes all the personal protective equipment and other medical goods so widely used to fight the CCP Virus), employment in May climbed by 400 on month, April’s initially reported 200 loss is now estimated at just 100, and March’s unrevised 1,100 increase stayed unrevised. These results mean that these sectors have increased their workforces by 4.36 percent since February, 2020, versus the 3.88 percent calculable last month.

The large pharmaceuticals and medicines industry was a partial exception to this pattern, losing 100 jobs sequentially in May. But April’s initially reported 1,400 rise (the best monthly performance since last June’s 2,600) is now judged to have been 1,500. And March’s advance stayed at an upwardly revised 1,200. As a result, these industries now employ 10.10 percent more workers than in immediately pre-pandemic-y February, 2020, versus the 9.78 percent calculable last month.

The medicines subsector containing vaccines hired 600 net new employees on month in May, April’s 1,100 payrolls increase (the best such performance since December’s 2,000), stayed unrevised, as was March’s previously upgraded 600 increase. Consequently, these companies’ headcounts are now 25.08 percent above their February, 2020 levels, versus the 24.47 percent improvement calculable last month.

Good job creation also continued throughout an aerospace cluster hit especially hard by CCP Virus-related travel restrictions. Aircraft manufacturers added 1,300 workers in May, their most robust monthly hiring since last June’s 4,000 jump. April’s initially reported climb of 200 was upgraded to 500, and March’s results stayed at an upwardly revised 1,200. These companies’ workforces have now crept to within 10.30 percent of their pre-pandemic total, versus the 10.96 percent shortfall calculable last month.\

In aircraft engines and engine parts, jobs rose by 700 sequentially in May, and though April’s initially reported increase of 900 is now judged to be 800, it was still the best such performance since February’s increase of 900. March’s new hires stayed at an upwardly revised 600, leaving employment in this sector 10.91 percent below February, 2020 levels, versus the 11.56 percent calculable last month.\

Non-engine aircraft parts and equipment makers kept making steady employment progress as well. They added 300 workers on month in May, and their initially reported new April hiring of 300 is now estimated at 400. March’s employment increase stayed unrevised at 700, but this sector still employs 15.14 percent fewer workers than in February, 2020, versus the 15.48 percent calculable last month.

With the Federal Reserve still on record as seeing the need for slowing the economy’s growth (at best) in order to fight inflation, signs of recession multiplying (e.g., here), domestic industry’s major export markets looking increasingly weak as well, the Ukraine War dragging on, and supply chain problems ongoing (see, e.g., here and here) it’s difficult to expect U.S.-based manufacturers to escape these powerful downdrafts. But these companies have kept turning in remarkably strong results in production as well as hiring, so who’s to say they can’t keep bucking the odds?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(What’s Left of) Our Economy: Pre-Ukraine War, Anyway, U.S. Manufacturing Employment Regained Momentum

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aircraft, aircraft engines, aircraft parts, automotive, CCP Virus, coronavirus, COVID 19, fabricated metals products, food products, Jobs, Labor Department, machinery, manufacturing, non-farm payrolls, personal protective equipment, pharmaceuticals, PPE, semiconductor shortage, semiconductors, surgical equipment, Ukraine-Russia war, vaccines, Wuhan virus, {What's Left of) Our Economy

As strong as U.S.-based manufacturing’s jobs performance looked on the surface in February, a closer look at the numbers released by the Labor Department this morning reveals that it was even better. The big reason? The 36,000 jobs that domestic industry gained last month came despite an 18,000 falloff in the automotive sector, which remained troubled not only by a global semiconductor shortage that will clearly end one of these days, but by a Canadian truckers’ protest that closed a bridge that’s a key transit route for Canadian-made auto parts needed by U.S. auto plants.

Moreover, revisions of previous months’ data were excellent. January’s initially judged 13,000 sequential employment pickup is now pegged at 16,000 and December’s advance was increased from an already upwardly revised 32,000 to 41,000.

Manufacturers didn’t quite keep pace with the rest of the country’s non-farm businesses in February (the Labor Department’s definition of the American employers’ universe). But given the torrid rate of recent economy-wide net job creation, that performance is hardly shabby, and it’s held its own – literally – during the entire sharp recovery achieved by the economy since its April, 2020 pandemic low point.

Before the CCP Virus began seriously distorting the economy’s behavior (in February, 2020), manufacturing jobs accounted for 8.38 percent of total non-farm payrolls. Including the new revisions, this figure had hit 8.40 percent in January of this year, but the February report showed a dip back to 8.38 percent.

The private sector story has been remarkably similar. Manufacturing employment represented 9.83 percent of that sector’s total jobs in February, 2020. Including the new revisions, the share had risen to 9.86 percent in January of this year, but as of Februay, it had retreated back to 9.83 percent.

Put differently, the entire non-farm economy has now replaced 19.886 million (90.43 percent) of the 21.991 million jobs lost during the terrible months of March and April, 2020. The private sector has replaced fully 20.092 million (fully 95.60 percent) of the 21.016 million positions it shed that spring. Manufacturing has replaced 1.184 million (86.93 percent) of its 1.362 million employment drop. But industry’s share of total jobs has stayed stable because its jobs depression in 2020 was less severe than the entire economy’s or the larger private sector’s

February’s biggest manufacturing jobs winners among the major sectors tracked by the Labor Department were highly concentrated – and all were among January’s stellar performers. They were:

>Fabricated metals products added 10,500 jobs on month – though January’s previously reported 5,000 advance is now estimated at 3,700, and the industry’s employment is still 2.95 percent below its immediate pre-pandemic February, 2020 levels (versus 1.39 percent for all of manufacturing);

>Machinery, whose 8,300 increase is especially encouraging, because its products are used so widely throughout the entire economy. But it’s still 2.92 percent shy of its job level in February, 2020;

>and food products, whose payrolls climbed by 7,200, and whose January results were revised up from a 5,200 improvement to 5,800. This progress brought pushed food manufacturing employment levels to 1.01 percent above those in February, 2020.

Meanwhile, automotive was February’s only significant jobs loser. Its 18,000 monthly employment nosedive was its worst such performance since last April’s 49,100 plunge (also due to semiconductor woes). At least its previously reported 4,900 January sequential jobs drop has been revised up to a 3,500 loss. But automotive employment is still 2.55 percent below immediate pre-pandemic levels.

As always, the most detailed employment data for pandemic-related industries are one month behind those in the broader categories, and their January employment picture showed improvement overall.

Payrolls in the semiconductor and related devices segment increased by 200 on month in January, consistent with their very slow growth over the last five years – including during the pandemic era. Interestingly, its companies actually hired more on net during the very sharp CCP Virus-induced recession of 2020 (by 0.59 percent). Since February, 2020, its payrolls are up by 0.86 percent.

Employment increases stayed strong in January in the surgical appliances and supplies sector, which contains personal protective equipment and similar goods. This industry added 1,700 jobs on net, December’s monthly advance remained at 1,100, and November’s results stayed at an upgraded 3,100 increase. Consequently, the surgical appliances and supplies workforce is now 3.41 percent bigger than in pre-pandemicky February, 2020.

January pharmaceuticals and medicines employment dipped by 100 sequentially, however, and December’s 2,400 hiring jump was downgraded to just 900. November’s 700 jobs growth figure was unrevised. Even so, employment in this sector is 8.23 percent higher than just before the major initial CCP Virus hit to the economy.

As for the medicines subsector containing vaccines, the January figures and revisions seem to reveal some lost hiring steam. January monthly job growth was just 500 – the weakest since July’s 100 – and December’s excellent initially reported 2,400 rise is now judged to have been 2,000. November’s own 2,000 increase was unrevised, though, and job growth in this sector since February, 2020 is still a robust 22.23 percent.

January was a much better month than December for the aviation cluster – except oddly for aircaft. That sector, dominated by Boeing, saw employment shrink by 800 sequentially – is worst such performance since July’s 900 drop. Yet December’s originally estimated 600 employment decrease was upgraded to a decline of 400, and November’s results remained at a downgraded 500 job gain. After these latest fluctuations, aircraft industry employment fell to 11.78 percent less than in February, 2020.

Aircraft engines and engine parts makers, however, hired 1,000 workers on net in January – theit best performance since May, 2020’s 4,700, which came early during the strong late-spring recovery from the virus-induced recession. December’s initially reported jobs gain of 500 was revised up to 700, but November’s loss of 300 stayed unrevised. So although employment in these companies in January was 14.07 percent less than in February, 2020, it’s been closing the gap lately.

A notable employment rebound came in non-engine aircraft parts and equipment, where payrolls rose by 500 in January sinking by an unrevised 900 in December. But November’s results were downgraded from no change to a decrease of 100. And the sector payrolls are still down 17.30 percent since Februay, 2020.

I’m holding off on my usual prognosis for U.S. manufacturing employment because of the Russian invasion of Ukraine and its likely non-trivial economic fallout for the United States, and its probably greater repercussions for the rest of the world (to which domestic manufacturers sell a great deal). U.S.-based industry’s resilience throughout the pandemic has been extraodinary, but big power conflict could create a new and much more formidable set of challenges entirely.

(What’s Left of) Our Economy: No Winter of Discontent for U.S. Manufacturing Production

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aerospace, aircraft, aircraft parts, automotive, CCP Virus, coronavirus, COVID 19, Federal Reserve, food products, inflation-adjusted output, machinery, manufacturing, medical equipment, Omicron variant, pharmaceuticals, real output, semiconductor shortage, semiconductors, supply chains, textiles, Wuhan virus, {What's Left of) Our Economy

Today’s Federal Reserve report on industrial production (for January) showed once again that if you’re looking for clickbait-y news about the economy, don’t look at U.S. manufacturing. The new figures showed not only that inflation-adjusted domestic manufacturing output grinded out another pretty good monthly gain (0.22 percent), but that whatever Omicron-related hit to industry’s growth was delivered in December was much smaller than first estimated (a decline of just -0.07 percent instead of -0.28 percent). And revisions overall for previous months were positive.

This performance left real manufacturing production 2.49 percent above the levels it hit in February. 2020 – the last full data month before the CCP Virus and its effects began impacting the economy (and everything else). December’s revision, moreover, pushed industry’s constant dollar expansion in 2021 up from 3.71 percent to 4.06 percent. That’s still the highest level since 2011’s 6.48 percent, but this strong growth also partly reflected one of those CCP Virus baseline effects – since between 2019 and 2020, domestic manufacturing shrank by 1.94 percent after inflation.

With January’s price-adjusted monthly production increases broad-based, the list of significant winners was longer than usual. For the major industry groupings tracked by the Fed, it includes (in descending order):

>the 1.43 percent monthly jump in textiles and products’ constant dollar production, which continued a strong recent run. All the same, these industries remain 1.61 percent smaller in real terms than in pre-pandemic-y February, 2020;

>an especially encouraging 1.37 percent real output rise in miscellaneous durable goods – a category that contains the personal protective equipment and respirators so crucial to the pandemic response. This advance did follow a big sequential production drop in these products in September, but at least it’s now judged to be 1.91 percent, rather than 2.68 percent. As a result, the miscellaneous durable goods industries put together are now 7.20 percent larger than in February, 2020;

>a 1.08 percent rise in inflation-adjusted machinery production that’s also encouraging because this sector’s products are used so widely throughout the rest of manufacturing and the non-manufacturing economy. This increase was the best since July’s 2.85 percent pop, and December’s good initially reported 0.68 percent improvement is now pegged at 0.87 percent;

>food products’ 0.90 percent after-inflation growth, which continues a long stretch of steady improvement. Inflation-adjusted output in this sector is only 1.25 percent higher than in February. 2020 – but it never suffered the huge downturn of spring 2020 that the rest of manufacturing and the economy experienced, So it’s never benefited much from any baseline effect;

>a 0.87 percent increase in the aerospace and miscellaneous transportation sector. January’s performance didn’t make up for the 0.97 percent December drop that was these industries’ worst since August’s 2.31 percent nosedive. But output in this cluster is still 13.08 percent greater after inflation than in February, 2020.

Manufacturing’s biggest January production losers included:

>petroleum and coal products, where a 1.47 percent monthly after-inflation slump was its second consecutive significant decrease (although December’s decrease is now judged to be 1.46 percent, not 1.58 percent). Price-adjusted production in this sector is now down by 5.92 percent since February, 2020, just before the pandemic rocked the economy;

>the 1.44 percent retreat registered by printing and related support activities. December’s initially reported 1.82 percent downturn is now estimated at just 1.02 percent, but real output in these sectors is still down 4.95 percent since Febuary, 2020;

>and a 0.89 percent constant dollar monthly production fall-off in automotive, which keeps struggling with the global semiconductor shortage. Both the December and November results received big upgrades (from a 1.29 percent decrease to a 0.38 percent slide in the former, and from a 1.69 percent drop to a 0.41 percent decline in the latter). But real output of vehicles and their parts is 6.25 percent short of their February, 2020 figure.

January’s generally good manufacturing output results carried over into industries that have been prominent in the news during the pandemic.

In aircraft and parts, price-adjusted monthly production rose 1.37 percent – the best rate since August’s 3.44 percent. Revisions were mixed, with December’s 0.38 percent decrease revised down to a 0.74 percent fall-off, and November’s once-upgraded 1.04 percent decrease pushed up again to a 0.69 percent dip. Even so, inflation-adjusted output in these industries is now 13.14 percent higher than in pre-pandemicky February, 2020, as opposed to the 10.71 percent growth calculable from last month’s Fed release.

Pharmaceuticals and medicines saw a January constant dollar output advance of 0.27 percent, and December’s previously reported 0.13 percent decrease was revised all the way up to a 0.81 percent gain. In real terms, therefore, these industries are 14.91 percent bigger than in February, 2020, as opposed to the 13.42 percent calculable last month.

In line with the pattern revealed in their miscellaneous durable goods super-sector, inflation-adjusted output of medical equipment and supplies rebounded in January, with its 2.50 percent increase representing the best monthly performance since July, 2020’s 10.78 percent burst. (In last month’s report, I mistakenly wrote that April, 2020 had seen the previous best.)

Moreover, the initially reported 2.75 percent after-inflation output swoon for December has been upwardly revised to a decrease of 1.97 percent. These developments were enough to leave real medical equipment and supplies production 4.43 percent above their levels of February, 2020. As of last month, they were 1.50 percent below.

Finally, let’s add semiconductors to the list of pandemic industries examined. In tandem with “other electronic components” (the joint category tracked by the Fed), their real output declined fractionally on month in January, which broke a streak of steady growth that resumed last June. Price-adjusted output in this group of industries is fully 20.66 percent above its immediate pre-pandemic level – and was never significantly depressed by the steep virus-induced recession of early spring, 2020.

Especially if the CCP Virus actually moves to the rear-view mirror in upcoming weeks and months (in the form of becoming endemic, not disappearing altogether), then the outlook seems bright for domestic manufacturing. Granted it’s benefited from gigantic stimulus from fiscal and monetary policy, and those spigots are being tightened and crimped. But historically speaking, they’re by no means tight or closed, and there’s no reason to believe that if smaller amounts of stimulus start slowing growth meaningfully, that Washington won’t open the floodgates again. In addition, consumers’ finances still seem healthy, and Americans’ determination to spend seems unchecked (which is in part why inflation has been so persistent).

A return to public health normality should further untangle supply chain snags, ease labor shortages, and open recovering foreign economies wider to U.S. exports (though U.S. imports can be expected to rise as well). Just as important, it will remove most of the unprecedented uncertainty manufacturers have faced for the last two years and counting.

And although inflation is still likely to be elevated (not least because of energy prices, which are a big major cost to many manufacturing industries), so far domestic industry has shown the ability to handle it. As they say on Wall Street, past performance is no guarantee of future returns. But it’s at the least impressive evidence for optimism.

(What’s Left of) Our Economy: Steady as She Goes for U.S. Manufacturing Employment

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However disappointing America’s November economy-wide job creation was, the official U.S. statistics released this morning show that you shouldn’t blame the nation’s manufacturers. Although total non-farm payrolls (NFP – the domestic employment universe of the U.S. Labor Department, which tracks these trends) advanced sequentially by a modest 210,000 (the worst such figure since last December’s 306,000 monthly loss), U.S.-based industry added a solid 31,000 net new positions. And revisions of the previous few months strong numbers were revised downward only moderately.

Speaking of revisions, it’s especially important today to note that the new NFP statistics are still preliminary – and will be for two more months. It’s especially important because recently – and no doubt largely due to the unprecedentedly weird nature of the CCP Virus-era U.S. economy – revisions have been enormous. For example, August’s initially reported NFP increase was just 235,000. Since then, it’s been upgraded all the way up to 483,000. The first September result – 194,000 – is now judged to be 379,000. So there’s no reason yet to conclude that the national economic sky is falling, or even changing much.

At first glance, based on this preliminary November data, manufacturing’s latest monthly employment performance slightly trailed that of the rest of the economy.

As of last month, including the revisions, industry has regained 1.132 million (or 81.73 percent) of the 1.385 million jobs it lost during the worst of the pandemic-induced recession in spring of 2020. So the manufacturing employment recovery improved by 1.53 percent on month.

The private sector overall as of November has now regained 18.376 million of the 21.353 million jobs it shed during peak CCP Virus. That 86.06 percent figure is 1.76 percent higher than October’s.

And the total non-farm sector has now recovered 18.450 million of the 22.362 million jobs it lost during that pandemic-triggered downturn. The resulting 82.50 percent mark is 1.60 percent better than October’s.

But don’t forget – manufacturing’s jobs decline during that terrible spring of 2020 was smaller proportionately than that of the private or non-farm sectors. So even though it’s had less ground to make up, U.S.-based industry has been creating new employment at nearly the pace of the economy as a whole.

November’s manufacturing jobs improvement was also noteworthy because it took place despite job losses of 10,100 in the automotive sector – which accounted for more than 40 percent of October’s advances. In fact, automotive revisions also accounted for 70 percent of the downgrading of that overall manufacturing October monthly manufacturing jobs improvement (from 60,000 to 48,000).

Other important November manufacturing job losers in the larger categories monitored by the Labor Department were computer and electronics products, which contains semiconductors, and which saw employment drop by 1,300 (its worst monthly decline since the 4,900 recorded in July, 2020); and – at least as troublingly, machinery. That latter industry, whose products are used throughout manufacturing and big non-manufacturing industries like agriculture and construction, shed 6,000 positions. That was its biggest month’s worth of job losses since the 861,000 disaster during the dark days of April, 2020.

These losses leave computer and electronics employment levels just 0.85 percent higher than just before the pandemic began distorting the American economy (in February, 2020) and machinery employment levels 2.63 percent lower.

November’s big manufacturing jobs winners were topped by the miscellaneous durable goods sector – which includes the major CCP Virus-related medical goods. Its payrolls surged by 10,000 – the most since July, 2020, during the first post- pandemic economic bounce, when they soared by 15,000. The fabricated metals products industry generated a 7,900 payroll jump that was its biggest since March’s 10,100. Food products added 7,400 employees for its best gain since August, 2020’s 19,000. Miscellaneous non-durable goods manufacturing was up 3,500. And electrical equipment and appliances’ payrolls grew by 3,300.

As always, the most detailed employment data for pandemic-related industries is one month behind those in the broader categories, and their October job creation was generally solid.

On the disappointing side was the surgical appliances and supplies sector. This industry contains personal protective equipment and similar goods, and the miscellaneous durable goods sector in which it’s been classified saw employment rise by a respectable 2,900 sequentially in October. But only 100 of these new positions came in the surgical appliances and supplies sub-sector. At the same time, September’s initially reported 900 jobs increase was revised up to 1,300, so maybe October will be a statistical blip – assuming of course that it’s not substantially revised, too. And as of October, payrolls in this sector have climbed by 8.27 percent over their immediate pre-CCP Virus February, 2020 levels – compared with the 7.79 percent calculable from the previous jobs report.

The overall pharmaceuticals and medicines industry performed better, with payrolls swelling by 1,500 in October. Still, September’s initially reported jobs rise of 1,500 was revised down to 1,200. Therefore, employment in these sectors now stands 5.49 percent higher than in February, 2020 – better than the 4.62 percent calculable last month.

The medicines subsector containing vaccines expanded employment by 700 in October – down from September’s 1,700, but better than August’s 400. These results mean that this industry’s workforce is now 13.25 percent larger than in February, 2020.

U.S. aerospace giant Boeing’s manufacturing and safety problems have depressed employment in aircraft production along with the pandemic’s restrictions on travel, and payrolls improved by just 300 on month in October following an unrevised drop of 500 in September. But help may be on the way, with China having just decided that its troubled 737 Max model has passed safety inspections and may return to the China market after a two-year ban that greatly reduced the company’s – and overall U.S. – exports.

So although the American aircraft industry’s workforce in October was still 8.12 percent smaller than it was just before the CCP Virus era (down from the 8.24 percent shrinkage calculable last month), look for the sector to start closing the gap meaningfully.

Good news sure could be used by the U.S. aircraft engines and engine parts industry. In October, its employment dipped by 100, and September’s initially reported jobs gain of 600 has been downgraded to 400. This sector’s workforce is now down 13.82 percent since immediate pre-pandemic-y February, 2020 – more than the 13.49 percent calculable last month.

The situation in non-engine aircraft parts and equipment was a good deal better. It grew payrolls by just 100 in October, but September’s initually reported jobs increase of 900 is now pegged at 1,200 – the best such performance since April, 2008. Consequently, whereas employment in this sector as of last month’s data was 15.82 percent less than in February, 2020, the figure is now 15.48 percent.

A significant Boeing comeback would add to the tailwinds identifiable behind the manufacturing jobs scene at this time. Others of course are the expected continued strong growth of the entire economy, a possibly stronger recovery globally, an easing of the supply chain crisis, the prospect of infrastructure bill money starting to be spent, and the seemingly shrinking odds that manufacturers and other U.S.-based businesses will face significant tax increases related to the Biden administration’s Build Back Better legislation.

Not that clouds are gone from the scene completely. Inflation seems to be picking up (although so far, and by the same token, manufacturers in toto have been able to pass on price increases to business and household customers). A defeat or postponement of Build Back Better will reduce the amount of government stimulus supporting consumer spending – and if the Federal Reserve follows through with its decision to start cutting back on some of its own stimulus, contractionary forces will strengthen. And of course there’s the virus wild card that’s just appeared in the form of the Omicron variant.

Still, the tailwinds now seem more impressive than the clouds, so I’m still optimistic about the future of manufacturing’s jobs recovery.

(What’s Left of) Our Economy: U.S. Manufacturing Hiring’s Sloughing Off Delta – For Now

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This morning’s official monthly U.S. jobs report (for August) brought a notable departure from recent trends. Athough the overall results were lousy (as total employment rose by just 235,000 during the month), manufacturing hiring soared by 37,000.

It’s true that nearly two-thirds of these gains (24,100) came from the automotive sector, which has been roiled recently by a shortage of semiconductors that’s wreaked havoc on the output of today’s increasingly electronics-stuffed vehicles. It’s also true that this progress might be snuffed out soon by the still widening spread of the CCP Virus’ highly infectious Delta variant and whatever new curbs on economic activity and consumer behavior it might keep prompting.

But it’s also true that domestic industry’s strong hiring in August came during a month when Delta had already become front-page news – which surely expains much of the much-weaker-than expected rise last month in overall non-farm payrolls (NFP – the U.S. jobs universe of the Labor Department that produces the employment data).

And it’s true as well that the major upward revision revealed to the July manufacturing jobs increase (all the way from 27,000 to 52,000 – the best such performance since last August’s 55,000) entailed much more than the vehicles and parts sectors (where the hiring advance was judged to be 10,500 instead of merely 800).

For example, July’s machinery jobs gains were upgraded from 6,800 to 9,100 (its strongest monthly result since last September’s 12,200); those for electrical equipment and appliances was estimated at 1,500 instead of 200; and employment in the plastics and rubber sectors was pegged at 2,300, not 300.

Despite its last excellent two months, U.S.-based manufacturing remained a job-creation laggard during the pandemic period as of August. But it became less of a laggard. Since the deep CCP Virus- and lockdowns-induced downturn of March and April, 2020, when manufacturers shed 1.385 million jobs, these companies have boosted employment by 1.007 million – erasing 72.71 percent of those losses. That share of regained jobs is up from the 68.74 percent level it reached in July.

That’s faster improvement than registered by the private sector, whose regained job percentage rose from 76.96 to 78.72, and by the total non-farm economy, where the advance rose from 74.50 percent to 76.60 percent.

Moreover, it’s important to remember that during the economy’s spring, 2020 woes, manufacturing employment suffered less than payrolls in the rest of the economy. Its job levels fell by 10.82 percent, compared with 16.46 percent for the private sector and 14.66 for the entire non-farm economy.

As with the July revisions, the list of significant manufacturing employment winners in August was hardly confined to the automotive industry. Among the major industry categories used by the U.S. government, fabricated metal products payrolls increased by 6,600 on month (the highest sequential boost since March’s 10,100); plastics and rubber products by 3,100 (its best such performance since February’s 4,500); and food manufacturing (1.600).

The biggest July jobs losers were electrical equipment and appliances (down 3,100, for its worst hiring month since January, when its payrolls fell by 3,400) and miscellaneous durable goods (a category containing personal protective equipment – PPE – and other medical supplies crucial for fighting the CCP Virus), whose 1,800 jobs lost were the worst such total since the entire economy’s spring, 2020 meltdown.

Also somewhat discouraging – job creation in the machinery sector, whose products are used elsewhere in manufacturing and throughout the rest of the economy, flatlined in August following its big 9,100 July spike.

The most detailed employment data for pandemic-related industries is one month behind those in the broader categories, but their July job-creation performance was decidedly mixed. In surgical appliances and supplies (the sector containing PPE and similar goods), May’s previously reported payroll decline of 900 is now judged to be a drop of 1,900, but June’s 500 jobs increase remained intact and was followed by an identical improvement in July. As a result, employment in this crucial national health security sector is now 9.22 percent above immediate pre-pandemic levels.

The overall pharmaceuticals and medicines industry saw hiring slow down notably in July – from a downwardly revised 2,300 in June to 400. May’s downwardly revised loss of 300 jobs stayed intact. These changes left payrolls in the sector 4.72 percent above February, 2020’s immediate pre-pandemic levels.

The story was little better in the pharmaceuticals subsector containing.vaccines. Its May and June employment gains are still judged to be 1,000 each, and no jobs at all were added in July. But its workforce is still 10.21 percent higher than just before the pandemic.

The July results showed that aircraft industry employment is still on a roller coaster, since Boeing is still struggling to overcome the manufacturing and safety issues it’s faced in recent years, along with the CCP Virus-related slump in business and leisure travel. May’s 5,500 monthly plunge in employment was unrevised in this morning’s figures, June’s 4,500 increase was upgraded to 4,700, but payrolls retreated again in July – by 1,500. Due to all these fluctuations, aircraft employment fell to 8.08 percent below its levels just before the pandemic arrived in force in the United States.

The aircraft engines and parts industries added 200 employees on month in July, but June’s previously reported increase of 500 was downgraded to 400. As a result, payrolls are down fully 14.80 percent since immediate pre-pandemic February, 2020.

It’s still possible that the Delta, or some other, CCP Virus variant will lower the boom on domestic manufacturing employment going forward – both because economic activity and therefore demand for manufactured goods will stagnate or drop not only in the United States, but in industry’s important foreign markets. Supply chain snags are no sure bet to clear up any time soon, either.

Nonetheless, U.S.-based manufacturing is still clearly benefiting from the Trump tariffs continued by President Biden that are pricing huge amounts of metals and Chinese-made goods out of the domestic market. Vast amounts of economic stimulus are still pouring into the American and foreign economies. And there remains tremendous pent-up demand among U.S. consumers and businesses alike, due to the lofty heights that household savings have reached and to clogged logistics systems. (A “hard” infrastructure bill will help U.S.-based manufacturers, too. But despite efforts to speed up the permitting process, regulations that can long delay the launch of new projects still may mean that the much of the new work will take months and even years before they’re “shovel ready.”)

And as I keep pointing out, those with the most skin in this game – domestic manufacturers themselves – keep professing optimism. (See, e.g., here and here.) That last consideration still tilts the balance toward manufacturing bullishness for me.

(What’s Left of) Our Economy: A “Gentleman’s C” for the New Manufacturing Jobs Numbers

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June’s gains weren’t nearly enough to overcome the latest trend in U.S. manufacturing employment: From a job growth leader earlier during the CCP Virus pandemic, domestic industry has turned into a laggard. It’s not lagging by a big margin, but given significant net headwinds it should still be enjoying, recent results are clearly disappointing.

This morning, the Labor Department reported that U.S.-based manufacturers created 15,000 net new jobs in June – a modest number given the 662,000 increase in total private sector employment on month. At least revisions were positive. May’s initially reported 23,000 monthly improvement is now judged to be 39,000, but April’s already downwardly revised 32,000 sequential job loss is now pegged at 35,000.

In many of the nation’s supposedly prestige colleges, the grade earned by this kind of result would be called a “Gentleman’s C.”

As a result, domestic manufacturing has now regained 904,000 (66.32 percent) of the 1.363 million jobs lost during the pandemic. The numbers for the private sector overall are 72.98 percent of the 21.353 million lost jobs that have been recovered, and for the total non-farm economy (the definition of the American employment universe used by the U.S. government, which includes government jobs) 69.75 percent of the 22.362 million jobs lost.

A manufacturing optimist (and I’ve been one of them) can note that industry took less of an employment hit during the pandemic-loss months of March and April, 2020. Manufacturing employment sank by 10.65 percent, versus 16.46 percent for the private sector and 14.66 percent for the whole non-farm economy.

But nowadays, domestic manufacturers are still benefiting from major tariffs plus massive government stimulus on both the fiscal and monetary fronts, and from the huge ramp up in vaccine production. Reopening-related bottlenecks clearly are causing problems, but according to the major national surveys that measure how manufacturers themselves believe they’re faring, production and new orders for their products keep growing strongly. (For the newest ones, see here and here.) Even given equally widespread reports that new workers are hard to find, I expected hiring to remain much more robust than it has.

One explanation may be higher productivity, which enables businesses to turn out more goods with fewer workers. But given the longstanding difficulties of gauging this measure of efficiency, and undoubted pandemic-era distortions, I’m reluctant to put too much stock in this argument.

The shortages issues have been once again illustrated by the dominance of the automotive sector in the June manufacturing jobs picture. Payrolls of vehicles and parts companies fell by 12,300 – the biggest individual sector decreases by far – and surely stem from the continuing global shortage of the computer chips that have become ever more important parts of cars and trucks of all kinds.

One small bright spot in the June figures – the 300 jobs increase in the machinery sector. It’s an important indicator of the overall state of industrial hiring, since its products are used throughout industry (as well as in non-manufacturing sectors like agriculture and construction). At the same time, these new positions represented machinery’s weakest sequential performance since January’s 3,200 employment decrease.

Other big June manufacturing net hiring winners were furniture and related products (up 8,500, no doubt reflecting still strong home sales and remodeling activity), fabricated metals products (up 5,700, which is noteworthy given still widespread whining about the ongoing U.S. tariffs on metals), and miscellaneous durable goods manufacturing (up 3,300 – encouraging since this category includes many pandemic-related medical supplies).

The biggest losers other than automotive were food products (down 4,100 and continuing an employment slump that began in January), electronic instruments (down 2,100 and possibly related to the semiconductor shortage), and printing and related activities (down 1,400).

Pandemic-related industries turned in a mixed hiring performance, according to the latest jobs report. Job creation accelerated significantly in the surgical appliances and supply sector, which contains protective gear like face masks, gloves and surgical goans. Its payrolls grew by 1,700 on month in May (its data are one month behind, as is the case with the other sectors examined below), up from April’s 1,200 and its best monthly total since last July’s 3,000. This surgical category’s workforce is now 11.50 percent bigger than in February, 2020 – the last pre-pandemic month.

But the May figures revealed a job creation setback in the overall pharmaceuticals and medicines industry. April’s hiring was revised down slightly, from 2,700 to 2,500, but the number was still solid. In May, however, its payrolls shrank by 400, its worst such performance since pandemicky April, 2020. And its workforce is only 3.82 percent greater than in February, 2020.

Better news came out of the pharmaceuticals subsector containing vaccines, but not that much better. This industry added one thousand workers on net in May, but April’s initially reported 1,300 jobs increase was revised down to 1,100. Still, this vaccines-heavy sector now employs 9.20 percent more workers than just before the pandemic.

And in aircraft, Boeing’s continuing manufacturing and safety issues surely helped produce this industry’s worst jobs month – consisting of a 5,500 payroll decrease – since June, 2020’s 5,800. This sector has now lost 9.39 percent of its jobs since the final pre-pandemic month.

Interestingly, the aircraft engines and parts, and non-engine parts categories weren’t nearly as hard-hit job-wise in May. (The former even maintained employment levels.) But payrolls in each are down since February, 2020, by roughly twice as much proportionately as in aircraft.

Major uncertainties still hang over the domestic manufacturing jobs scene, and in one important respect – big new backups in Chinese ports – they’ve become murkier. Nor do Boeing’s problems seem ready to end any time soon. I’m still bullish on U.S.-based manufacturing’s employment outlook, at least in the short and medium terms mainly because American policy remains so overwhelmingly stimulative and its effects are still coursing through the economy. But I’m getting a little impatient for the numbers to start backing me up once again.