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

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

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

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

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

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

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

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

>machinery, another broad category whose 3,800 employment monthly growth was encouraging because its products are used to equip and modernize nearly all manufacturing and non-manufacturing sectors. So changes in its workforce can signal optimism or pessimism about their prospects. In addition, this headcount expansion was the tenth in a row,and the March advance was the biggest since November’s 5,800 .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

February’s biggest manufacturing jobs winners were:

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

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

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

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

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

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

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

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

February’s biggest manufacturing jobs losers were:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(What’s Left of) Our Economy: The Real Biden Record on Job Creation

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CCP Virus, coronavirus, COVID 19, Employment, healthcare services, Jobs, manufacturing, non-farm jobs, private sector, subsidized private sector, Wuhan virus, {What's Left of) Our Economy

No one can reasonably blame President Biden for running a victory lap right after last Friday’s official U.S. jobs figures (for July) came out. The 528,000 jobs added by employers more than doubled the consensus forecast, and undercut claims that his policies had created both historically torrid inflation and an actual or impending recession. And what U.S. President has ever resisted taking credit for whatever good economic news takes place during his term in office?

But in many key respects, Mr. Biden’s boasting went far overboard. For example, according to the President, “[W]e’re almost to 10 million jobs — almost to 10 million jobs since I took office.  And that’s the fastest job growth in history.”

Except that it’s not. Since he entered office, the overall economy (defined by the Labor Department as the non-farm economy), has indeed seen net employment growth of 9.519 million. But between April, 2020 (the early pandemic era bottom) through January, 2021, total payrolls grew by 12.504 million.

It’s true that the early post-pandemic bounceback was unusually fast, benefiting from a reopening-strengthened rubber band effect from an unusually deep downturn. But it’s also true that the 12-plus million pre-Biden employment boost came over nine months. The Biden-era jobs have been created over 18 months.

Another tall Biden tale: “Since I took office, we’ve created 642,000 American manufacturing jobs in America.  We’ve seen the biggest and the fastest job recovery in American manufacturing history since the ‘50s.”

The 642,000 number is correct. But during that pre-Biden phase of the recovery, employment in industry grew by 761,000. And the rubber band effect was somewhat weaker, since manufacturing lost a smaller share of its workforce during the depths of the pandemic than the rest of the economy.

Some job quality concerns are marring the Biden period record, too. Chiefly, fewer of those new jobs have been truly private sector jobs than during that prior recovery phase, and more have been jobs in government and in areas of the economy that I’ve called the subsidized private sector. These are categories like social services an especially the giant healthcare services sector that are heavily dependent on government funding for their economic performance – including their employment levels.

As I’ve repeatedly noted, many of these public sector and subsidized private sector jobs are vital for any modern economy. But their scale is influenced primarily by politicians’ decisions, not by market forces, and therefore they tell us relatively little about the economy’s real health.

Moreover, if you believe (as you should) that the private sector is more productive than the public sector, and that as a result its performance is the best guarantee of sustainable prosperity, then you want to see the private sector maintain a big lead in job creation over the government and subsidized private sector.

Unfortunately, that lead to date has eroded during the Biden presidency. Specifically, over the nine months of recovery before his inauguration, government (at all levels) plus subsidized private sector jobs accounted for 12.02 percent of the total expansion achieved in non-farm employment. But since then, these sectors have generated 16.92 percent of the total.

And government jobs accounted for all of this increase – and then some. During the pre-Biden recovery, they fell by 116,000. Under his administration, they’ve risen by 494,000.

President Biden is by no means responsible for the relative growth of government and especially subsidized private sector employment. As known by RealityChek regulars, that’s been a long-time trend, at least until the CCP Virus came along. Further, because of the country’s aging population, it could well be an unstoppable trend (unless the healthcare system in particular somehow becomes a lot more efficient). But as mentioned above, one price to date has been a less healthy economy. And how nice it would be if politicians spent more time talking about this tradeoff and how to at least ease it, and less time spinning jobs data so hard that they veer into misinformation.             

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The worst performers among July’s few maufacturing losers:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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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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: U.S. Manufacturing Employment Powers Through Ukraine Jitters, Too

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The Ukraine war looks like the latest disastrous development that’s failed to stop the impressive growth in U.S. domestic manufacturing employment – just as has been the case recently with the Omicron variant of the CCP Virus and surging inflation. And let’s not forget that the Federal Reserve has begun raising interest rates and signaled that steeper hikes are on the way – steps of course designed to cool off the economy, including the demand for manufactured goods.

U.S.-based industry added a strong 38,000 net new jobs on month in March, according to this morning’s monthly employment report from the Labor Department, and revisions were positive. February’s initially reported 36,000 sequential improvement was upgraded to 38,000, and January’s already upwardly revised 16,000 advance is now judged to have been 26,000.

In fact, domestic industry slightly outperformed the rest of the non-farm economy (the Labor Department’s definition of the U.S. jobs universe) job-wise in March, with its share of non-farm employment inching up from 8.38 percent to 8.39 percent. These results, moreover, show that manufacturing jobs have grown a bit faster than the overall economy’s throughout the pandemic period. In February, 2020, the last data month before the virus and related lockdowns and behavioral curbs began roiling and distorting the economy, manufacturing accounted for 8.38 percent of total non-farm jobs.

The comparison with the private sector isn’t quite as impressive, but satisfactory all the same. Manufacturing’s share of those jobs as of March was 9.83 percent – exactly the same as it was in February, 2020. And some context is essential here: U.S. manufacturing payrolls have held their own and then some even though the massive, sweeping Trump tariffs on imports from China – which were supposed to cripple domestic industry – are still almost entirely in place, as are many of the former president’s tariffs and other trade curbs on metals.

From another vantage point, manufacturing has now replaced 1.244 million (90.60 percent) of the 1.362 million jobs it shed in March and April, 2020 – the peak of the CCP Virus’ first wave.

That trails the 92.82 percent of non-farm workers and 95.46 percent of private sector workers hired back during this period. But the gap isn’t big at all, and manufacturers shrunk their headcounts proportionately less than the rest of the economy during that horrendous spring of 2020. So they didn’t have as much ground to make up.

February’s biggest manufacturing jobs winners among the major sectors tracked by the Labor Department were:

>transport equipment, where payrolls in March advances by 10,800 – their best such performance since last August’s 19,000. At the same time, this increase followed a 19,800 February jobs plunge that was the sector’s worst such performance since the automotive sub-sector’s semiconductor shortage woes led to a nosedive of 48,100 in April, 2021. All this volatility left this sector’s employment levels 4.05 percent below those in that final pre-pandemic data month of Februay, 2020 – versus the one percent decrease since then by manufacturing overall;

>chemicals, whose 7,200 monthly jobs jump was its best ever (or at least since figures began being tracked in 1990). The previous all-time high was the 6,600 gain of January, 2021. This huge industry’s headcount is now up 4.49 percent since February, 2020;

>electrical equipment and appliances, where employment rose sequentially by 3,800 for its strongest increase since March, 2021’s 4,200. Jobs-wise, these industries are now 2.82 percent larger than in Febuary, 2020;

>and automotive. This industry, a sub-sector of transportation equipment, boosted employment by 6,400 in March, the most in a month since last October’s 34,200 burst. But underscoring the volatility among vehicle and parts makers, This March increase followed a 16,000 drop-off in February that was the biggest decrease since the 49,100 jobs lost in April, 2021. These ups and downs still have left automotive employment 1.32 percent their February, 2020 levels.

Machinery’s 1,700 monthly jobs gain in March wasn’t exceptional by the above standards. But RealityChek regulars know it’s of special importance because its products are so widely used throughout manufacturing and the rest of the economy. And in a somewhat discouraging development, this sector’s initially reported 8,300 jobs growth was revised down to 6,600. And its payrolls are still 2.89 percent smaller than in February, 2020.

The only significant jobs loser in March was non-metallic mineral products, where employment sank by 4,500 on month. That was the sector’s worst such perforance since last May’s 5,300 decline, but the March downturn snapped a string of good gains for these companies, and their workforces are 2.81 percent above their February, 2020 levels.

As always, the most detailed employment data for pandemic-related industries are one month behind those in the broader categories, and as with the rest of domestic industry for February, their employment picture showed improvement overall.

In that shortages-plagued semiconductor and related devices sector, employment dipped by 100 on month, but January’s initially reported 200 increase was revised up to 300– its best such performance since October’s 1,000 advance. Since February, 2020, its headcount has climbed by only 0.86 percent, but these companies actually added jobs during the very steep CCP Virus-induced recession of spring, 2020.

Surgical appliances and supplies makers – whose products include personal protective equipment and similar medical goods – boosted employment by 800 in February. January’s initially reported 1,700 jobs increase was downgraded to 1,300, and December’s results were unrevised at 1,100. These health security-related companies have expanded their workforces by 3.79 percent since February, 2020.

The employment news was particularly good in the very big pharmaceuticals and medicines industry. Its February monthly employment increase of 1,300 was the best since September’s 1,600, and January’s initially reported dip of 100 now stands as an increase of 1,100. December’s downwardly revised 900 jobs gain remained the same, and these companies have now increased their employee numbers by 9.04 percent since February, 2020.

The medicines subsector containing vaccines didn’t perform nearly as robustly in February, but still grew jobs by 800. January’s initially reported 500 employment increase and December’s downwardly revised 2,000 expansion remained the same. The vaccine industry workforce is now 23.05 percent larger than in February, 2020.

The aviation cluster enjoyed a good hiring month in February, too. Jobs in the aircaft industry, dominated by Boeing and companies in its supply chain, rose by 500 – the best since the identical total in November. January’s initially reported downturn of 800 and December’s decrease of 400 remained unrevised. Aircraft employment is still off by 11.57 percent since February, 2020.

Makers of aircraft engines and engine parts expanded their workforces by 900 during February, and although January’s initially reported hiring figures were downgraded, the estimate went only from 1,000 to 900. December’s upwardly revised employment increase of 700 was unrevised, all of which helped these companies bring their payrolls to within 13.20 percent of their February, 2020 levels.

Jobs prospects in the deeply depressed non-engine aircraft parts and equipment sector keep looking up, too. Employment improved by 200 in February, and January’s initially reported job growth of 500 was revised all the way up to 1,500. December’s jobs losses stayed at 900, and although these industries’ headcounts are still 16.35 percent below February, 2020’s, that’s better than the 17.30 percent shortfall calculable last month.

Continuing headwinds are still imaginable for domestic manufacturing – like a dramatic escalation of the fighting in Ukraine (which could greatly heat up inflationary pressures and foster even greater Federal Reserve efforts to slow economic growth); a new CCP Virus variant that’s not only more infectious but more deadly; and more big China lockdowns that could further screw up global supply chains. But given the recent actual record, it’s even easier to imagine manufacturing employment continuing to improve.

(What’s Left of) Our Economy: U.S. Manufacturing Job Creation Stands Out Again

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Make that twice in a row. Just as in its November counterpart, the December official U.S. jobs data revealed sluggish overall American employment growth but better numbers for manufacturing. Even better, the gains were broad-based and the revisions of previous solid results were nicely positive.

A glass-half-empty type could rightly point out that industry’s 26,000 sequential payrolls gain last month was its weakest monthly result since April’s 35,000 employment drop. But the sector’s previously reported 31,000 sequential employment improvement is now pegged at 35,000. And after being downgraded from 60,000 to a (still-not-too shabby) 48,000, October’s increase has now been upgraded to 52,000.

For comparison’s sake, industry’s employment improvement came to 0.21 percent – as opposed to 0.17 percent for the private sector as a whole and 0.13 percent for “non-farm payrolls” (the U.S. Labor Department’s definition of the American employment universe).    

In fact, the December results continued a record of job out-performance that’s been consistent throughout the pandemic period.

As of December, manufacturers had replaced 84.19 percent (1.166 million) of the 1.385 million employees they’d shed during the short but steep CCP Virus-induced downturn of March and April, 2020. That figure’s 3.01 percent higher the 81.73 percent of regained jobs calculable from last month’s jobs report. Consequently, manufacturing payrolls are within 1.71 percent of their levels in February, 2020 – the last full data month before the pandemic began hammering and distorting the entire economy.

As for non-farm payrolls, they’ve now regained 84.02 percent (18.790 million) of the 22.362 million jobs lost during the worst of the pandemic. That’s 1.84 percent better than the 82.50 percent share calculable from last month’s jobs report. And there are now just 2.34 percent fewer non-farm U.S. jobs than in February, 2020.

As in the recent past, at first glance today it looks like the U.S. private sector has outdone manufacturing jobs-wise since the current economic rebound began. It’s recovered 87.61 percent (18.708 million) of its 21.353 million job loss during the spring of 2020. That’s 1.80 percent higher than the 86.06 percent figure calculable from the November jobs report. So it’s workforce is now 2.04 percent smaller than just before the pandemic.

But as known by RealityChek regulars, 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.

Indeed, just before the CCP Virus struck, manufacturing jobs represented 8.45 percent of total non-farm employment and 9.87 percent of private sector employment. As of December, these shares had risen to 8.45 percent and 9.90 percent, respectively.

The list of biggest jobs winners among the major manufacturing sub-sectors tracked by the Labor Department was headed by machinery – where payrolls rose by 7,000 on month in December. That was its biggest advance since July’s 8,700, and especially encouraging both because this industry lost 6,000 jobs in November (slightly better than the 7,000 decrease previously reported), and because its products are used throughout both manufacturing and big non-manufacturing industries like agriculture and construction.

Therefore, if machinery makers are adding strongly to their headcounts, they’re probably expecting demand for their goods to grow further. December’s hiring surge brought machinery employment to within 2.14 percent of its February, 2020 level.

Another major manufacturing employment gainer – automotive, where employment increased by 4,200 sequentially in December, and where the terrible 10,100 job loss reported last month for November is now judged to be just 5,900. As a result, payrolls in automotive – which remains dogged by the global semiconductor shortage – are now 5.28 percent lower than their immediate pre-pandemic levels.

Good December results were reported as well in the very big chemicals sector, which added 2,300 positions on month, and whose November performance was upgraded from no change to a 400-worker increase. Consequently, chemicals employment is now 1.30 percent greater than in February, 2020.

Other significant December manufacturing jobs winners included non-metallic mineral products (2,100) and plastics and rubber products (2,000).

The only manufacturing jobs loser that saw payrolls down by more than 1,000 was paper and paper products, where employment was off by 1,500. Even here, though, there was a somewhat bright side, as the decline was its first since July, and followed an upwardly revised 2,800 gain – its best since September, 2020’s 3,200. And this sub-sector’s employment levels are off just 1.84 percent since pre-pandemic-y February, 2020.

Given the aforementioned semiconductor shortage, however, it’s worth noting that December saw the semiconductors and electronic components industries (which, as the name suggests, includes more than just microchips), suffer their first back-to-back employment decline since March and April, 2020. The job reductions of 200 in November (upgraded from the previously reported 600) and 800 in December left employment levels 0.08 percent below those just before the CCP Virus struck.

As always, the most detailed employment data for pandemic-related industries are one month behind those in the broader categories, and their November job creation was mixed.

The surgical appliances and supplies sector, which contains personal protective equipment and similar goods, added 1,400 workers sequentially in November. And even though October net hiring remained unrevised at a small 100, these industries have now increased employment by 9.60 percent since February, 2020.

Yet the overall pharmaceuticals and medicines industry lost 600 jobs in November, after boosting employment by a downwardly revised 1,400 in October. Its workforce is now 5.27 percent larger than in February, 2020.

Much better results were turned in by the medicines subsector containing vaccines. October’s hiring gain was revised up from 700 to 800, and payrolls rose by another 1,400 in November. These advances have pushed these companies’ payrolls 14.66 higher than just before the pandemic’s arrival.

The mixed pattern continued in the aviation cluster, which has suffered both from aerospace giant Boeing’s manufacturing and safety problems and the pandemic’s restrictions on travel. Good news like the prospect of China allowing the troubled 737 Max model to return to its huge market reportedly have spurred the company to speed up a production rebound, and interestingly, U.S. aircraft employment climbed by 1,000 in November – the best monthly performance since July’s 4,700 jump.

But October’s previously reported small 300 jobs gain was revised down to 200, and with its workforce still 7.75 percent smaller than in February, 2020, aircraft employment’s comeback remains far from complete.

Moreover, the improving aircraft jobs picture doesn’t yet extend to aircraft suppliers. In aircraft engines and engine parts industry, October’s previously reported 100 job decline is now judged to be an increase of 100. But payrolls resumed shrinking in November (by 300), and employment in this sector is now off 13.93 percent since February, 2020.

In non-engine aircraft parts and equipment, employment was unchanged sequentially in November, but a jobs gain of 100 previously reported for October has now been downgraded to a job loss of 100. The bottom line? Its workforce is now 15.74 percent smaller than in February, 2020.

As has been so often the case, and like the rest of the economy, U.S. manufacturing faces perplexing – and in fact unprecedented crosswinds – going forward. And the uncertainties look all the more mysterious since these December jobs results pre-date the arrival of the wildly infectious Omicron variant of the CCP Virus – which could well lead to more health-related restrictions and behavioral changes, even tighter labor markets, and slower economic growth.

But unless Omicron prompts major, protracted shutdowns, manufacturing’s performance during the pandemic so far seems to justify optimism that industry will keep overcoming whatever obstacles come its way — whether policy or pathogens.

(What’s Left of) Our Economy: An October Classic for U.S. Manufacturing Jobs

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aircraft, aircraft engines, aircraft parts, automotive, Boeing, CCP Virus, chemicals, computer and electronics products, coronavirus, COVID 19, fabricated metals products, Jobs, machinery, manufacturing, non-farm jobs, personal protective equipment, pharmaceuticals, plastics and rubber products, printing, private sector, surgical equipment, vaccines, Wuhan virus, {What's Left of) Our Economy

As good as the October U.S. jobs numbers and revisions released this morning were, the manufacturing results were even better. Industry didn’t regain its status as the nation’s post-CCP Virus employment leader, but it managed to narrow the gap with the private sector and the entire non-farm sector (the U.S. government’s definition of the American employment universe, which also includes government jobs) even though those super-categories turned in sparkling performances themselves.

Domestic manufacturers grew their payrolls by 60,000 on month in October – the strongest sequential gain since the 342,000 rocket ride recorded in June, 2020, when the entire economy’s reopening from the CCP Virus’ initial wave and related economic curbs and consumer caution was in full swing.

Moreover, September’s initially reported 26,000 employment increase was upgraded to 31,000, and August’s downwardly revised 31,000 advance was revised all the way back up to 49,000.

As a result, U.S.-based manufacturing has now regained 1.115 million (80.50 percent) of the 1.385 million jobs it lost during the economy’s virus-induced low point of March and April, 2020. As of last month’s jobs report, its recovery rate was 76.17 percent.

The private sector’s jobs recovery rate rose from 81.74 percent as of the previous jobs release to the 84.57 percent reported today, and the non-farm economy’s recovery rate climbed from 78.78 percent to 81.20 percent. So manufacturing’s momentum picked up faster in October.

Industry’s recent record is all the more impressive considering that its CCP Virus jobs crash during the spring of 2020 (when its employment dropped by 10.82 percent) was smaller than that of the private sector (16.46 percent) or the non-farm sector (17.18 percent).

Put differently, since February, 2020 (the last full pre-pandemic data month), manufacturing’s share of non-farm jobs has risen from 8.39 percent to 8.45 percent (up from 8.43 percent reported in the previous jobs release), and its share of private sector jobs is up from 9.87 percent to 9.91 percent (the same number calculable from that previous release).

Unlike manufacturing’s September’s results, its October monthly jobs increase was highly concentrated in the automotive sector. That complex’s 27,700 sequential payroll improvement equalled 46.7 percent of industry’s 60,000 total. Moreover, the total vehicle and parts job losses of 6,300 reported for September are now judged to be only 5,600.

Interestingly, this job growth is consistent with recent signs that automakers have been learning to manage their way through a semiconductor shortage that’s still continuing. (See, e.g., here and here.)

Other big October manufacturing jobs winners among the major sectors broken out in the official jobs releases) were fabricated metals products (5,800), which keeps hiring strongly despite the continuation of metals tariffs that were supposed to be crippling; chemicals (5,600); printing and related support activites, another big jobs creator lately (4,200); computer and electronics products (3,500); and plastics and rubber products (3,000).

Only three broad manufacturing sectors shed workers seqentially in October – nonmetallic mineral products, furniture, and miscellaneous durable goods – and the losses were small in each case.

Machinery employment deserves special attention because its products are used so widely throughout both manufacturing and big non-manufacturing industries (like construction and agriculture), so its meager 200 October jobs gain was surprising and disappointing. But its robust initially reported 6,300 employment increase is now estimated at 6,500, and August’s results were revised up a second time – from 2,600 to 4,300.

As always, the most detailed employment data for pandemic-related industries is one month behind those in the broader categories, but their September job creation was encouraging overall.

Hiring in surgical appliances and supplies (the sector containing personal protective equipment and similar goods) rebounded by 900 in September, offsetting the news that August’s 2,500 jobs loss was revised down to 2,600. With July’s 900 increase remaining unrevised, the sector’s employment is now up 7.79 percent since February, 2020 – that last full pre-pandemic data month – compared with the 7.03 percent calculable from the previous jobs report.

September was a better jobs month than August in the overall pharmaceuticals and medicines industry, too. The August sequential employment decline of 400 remained unrevised, but payrolls rose by 1,500 in September. July’s upwardly revised jobs gain stayed at 500, leaving the sector’s employment now 5.11 percent higher than in February, 2020 – better than the 4.62 percent calculable last month.

U.S. aerospace giant Boeing isn’t yet out of the woods when it comes to manufacturing and safety problems, and as a result, American aircraft production employment took another hit in September, falling by 500. The net losses of 1,400 previously reported for August and July were unrevised, and the aircraft workforce is now 8.24 percent smaller than in February, 2020 – as opposed to the 8.04 percent shrinkage calculable last month.

But the jobs pictures for the stuff that makes up aircraft got better. Engines and engines parts makers hired 600 on net in September – their best monthly total since the same increase recorded last September. August’s previously reported job loss of 600 is now pegged at 500 and July’s downgraded employment increase remained at 300. The sector’s jobs total is still down by 13.79 percent since February, 2020, but that’s qn improvement over the 14.04 percent calculable a month ago.

Non-engine aircraft parts and equipment jobs were up 900 on month in September. You’d have to go back to June, 2019 to find a performance that good. But employment levels at these companies are still off by 15.82 percent since February, 2020 – just slightly better than he 16.17 percent loss calculable last month.

Not to sound pollyanish, but it’s now tough to identify significant headwinds that could hold manufacturing back from continued noteworthy employment gains. U.S. economic growth looks set to speed up. The CCP Virus may have begun retreating for good. And, strangely, because manufacturing workers have been quitting jobs at skyrocketing, record-shattering rates, their employers also have record-shattering numbers of positions to fill. (See the U.S. Labor Department’s interactive data bases for jobs turnover for the eye-popping specifics.) Even a soaring manufacturing trade deficit doesn’t seem to be making a difference.

Clearly, there’s a lot of pandemic-related distortion still going on. But for the time being, I can’t help but expect that more excellent manufacturing hiring numbers lie ahead.

(What’s Left of) Our Economy: Strong Crosswinds Roil the New U.S. Manufacturing Jobs Figures

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aerospace, air travel, automotive, CCP Virus, chemicals, coronavirus, COVID 19, Employment, fabricated metals products, infrastructure, Jobs, machinery, manufacturing, miscellaneous durable goods, miscellaneous non-durable goods, non-farm jobs, pharmaceuticals, PPE, private sector, regulation, semiconductor shortage, semiconductors, stimulus package, taxes, vaccines, wood products, Wuhan virus, {What's Left of) Our Economy

It’s tough to imagine a U.S. official monthly jobs report giving off so many conflicting signals about the health of domestic manufacturing and its outlook than the one that came out this morning (for April).

On the one hand, the sector’s 18,000 jobs loss was its worst monthly performance since the identical January setback. On the other hand, the problem was heavily concentrated in the automotive sector, which has been forced to cut back production due to the ongoing global semiconductor shortage. On the other, other hand (!), this shortage is unlikely to ease for many months. On still another hand, the revisions were strong. And some key manufacturing industries continued a recent pattern of solid results. At the same time, even removing the automotive results would still leave the rest of domestic manufacturing’s April employment performance decidedly weak.

I could go on in this vein – and will below.

The decisive automotive/semiconductor effect on the April manufacturing figures becomes clear enough upon realizing that this sector’s 27,000 sequential employment loss was considerably greater than manufacturing’s total on-month job decline. Nonetheless, even had automotive held its employment line, the consequent 9,000 manufacturing job increase would have been unimpressive at very best.

And yet there are those revisions. March’s initially reported 53,000 monthly manufacturing payroll increases – the best such figure since last September’s 55,000 – are now pegged at 54,000. Even better, February’s initially downgraded (from 21,000 to 18,000) monthly employment increase has now been revised all the way up to 35,000.

As a result, domestic industry has now regained 63.83 percent (or 870,000) of the 1.363 million jobs it shed during the height of the CCP Virus pandemic in spring, 2020. It’s still behind the private sector overall (which has recovered 66.88 percent of its pandemic peak employment loss), but still ahead of the overall economy’s (called the non-farm sector by the Labor Department, which issues the monthly jobs reports) 63.26 percent.

The only major April manufacturing jobs loser other than automotive was the small wood products sector (7,200). The big fabricated metals products industry saw employment fall by 2,900 on month in April, but the drop followed a large March gain that’s been downwardly revised but still stands at a strong 10,400.

The machinery numbers were downright encouraging, and that matters because as I keep reminding, this subsector’s products are used not only throughout the rest of domestic manufacturing, but in other important parts of the economy like construction and agriculture. Its April employment boost of 3,700 followed March job creation that was upgraded strongly to 5,400.

In the big miscellaneous durable goods sector, a catchall category that includes everything from surgical equipment and supplies (like personal healthcare protection equipment – PPE – more on which later) to jewelry to gaskets and fasteners to musical instruments, payrolls jumped by 12,600 – their best monthly performance since its 15,300 advance last July.

And two other significant manufacturing employers –miscellaneous non-durable goods and the big chemicals sectors (whose output is also used all over the economy) – each generated enjoyed healthy payrolls increases of 4,300 in April.

Even the industries closely related to the fight against the CCP Virus, whose employment performance since the pandemic’s arrival generally have disappointed, showed some signs of job-creation life in April.

The overall pharmaceutical industry added 1,500 jobs on month in March (the latest available figures) and Februay’s improvement remains a strong 1,700. Since the last pre-pandemic month (February, 2020), this sector’s payrolls have grown by 3.11 percent.

Hiring slowed in the pharmaceuticals subsector containing vaccines – from 1,300 sequentially in February (unchanged from the first estimate) to 500 in March (also the latest available figures). But these companies’ employment is still 6.77 percent higher than in that last pre-pandemic month of February, 2020.

The employment signals were mixed in the manufacturing category containing PPE goods like facemasks, gloves, and medical gowns. Monthly job creation in February was downgraded from zero to a loss of 100, but March’s results (also the most recent) came in at 900, and this sector now employs 8.75 percent more workers than in February, 2020.

In an aerospace industry troubled for years by Boeing’s safety woes, the recent jobs figures are literally all over the place. The latest (March) results show that payrolls for aircraft fell month-to-month in March by 1,800 – surely reflecting the continuing virus-generated slump in air travel. But February’s upward revisions were nothing less than stunning – skyrocketing from a jump of 1,000 to one of 11,700. Fluctuations – though more modest – were also evident in aircraft engines and parts, and non-engine aircraft parts.

Yet as confusing as the new manufacturing jobs figures have been, the future seems just as cloudy. Optimism remains justified by developments like the enormous amounts of stimulus still pouring into the U.S. economy, by the apparent certainty that a major injection of infratructure spending is (finally) on the way, and by the continuing reopening of the economy spurred by vaccinations and less consumer caution.

Even so, the semiconductor shortage is not only here to stay for some time, but has affected many other industries other than automotive. The rate of U.S. vaccinations is slowing and the virus – including the new variants – appears likely to stage something of a comeback when the weather cools again in the fall. Air travel may never recover to pre-virus levels, which will harm not only the aerospace industry per se, but its vast domestic supply chain. And higher taxes and many more regulations could well hit U.S.-based manufacturers – at least until the Congressional elections of 2022.

On balance, I’d still bet on a bright future for domestic industry – mainly because all the sentiment surveys show that manufacturers themselves are full of confidence, and because President Biden has kept in place all the Trump China and metals tariffs that have priced much foreign competition out of the U.S. market. But I’m far from willing to bet the ranch.