(What’s Left of) Our Economy: The Greatest Presidential Job Creator Ever?

Tags

Biden, Bureau of Labor Statistics, CCP Virus, coronavirus, COVID 19, Donald Trump, Employment, Jobs, lockdowns, NFP, non-farm payrolls, reopening, Wuhan virus, {What's Left of) Our Economy

However unwittingly, President Biden rendered the nation a major public service on Friday with his remarks on his administration’s achievements in boosting American job creation. Specifically, he provided a good indication of how many ways and how dramatically economic data can be spun.

According to the President, “we have added 6.4 million new jobs since January of last year — in one year. And that’s one of the most — that’s the most jobs in any calendar year by any president in history.”

A look at the data provided by the U.S. Bureau of Labor Statistics (BLS) shows that Mr. Biden actually slightly understated calendar 2021 overall net new job creation. Non-farm payrolls (BLS’ definition of the American employment universe) increased by 6.448 million during this period.

Mr. Biden’s focus on the calendar year, however, means that he’s taking credit for January. Not only wasn’t he inaugurated until January 20, but each month’s BLS job increase numbers cover the period between the middles of each month. (See the “Technical Note” section of each month’s report.) So the January job creation he’s claiming as his own stopped days before he entered office.

If it’s assumed that the current administration’s impact on employment (and the rest of the economy) didn’t start until the President took the Oath of Office – on a monthly basis, in February – then the employment increase that’s taken place on his watch so far is 6.215 million. That’s nearly 200,000 less than he claimed.

There’s no question that the employment picture orders of magnitude better than that of the last calendar year of the Trump administration – when non-farm payrolls cratered by 9.416 million.

At the same time, that calendar year includes the depths of the steep economic downturn induced by the CCP Virus’ arrival in the United States. In March and April, American employment levels crashdove by a sickening 22.362 million. And as should be remembered, including by those who view the Trump response to the pandemic itself as disastrously bad, this employment calamity mainly stemmed not from Trump economic policy decisions that presumably were inferior to their Biden administration counterparts. They mainly stemmed from health-related economic and behavioral restrictions that the former President supported only belatedly and reluctantly.

In fact, once the economy began reopening (raggedly, to be sure), job creation skyrocketed. From April, 2020 through January. 2021 – bringing the story up to just about the end of Trump’s presidency – NFP rose 12.575 million. That’s twice as much in absolute terms in nine months as in Mr. Biden’s 11 months in office.

As implied, though, this rapid improvement wasn’t mainly Trump’s doing. Clearly, economic stimulus measures helped. But far more important was a reopening and highly uneven return to economic normality. Moreover, because of the federal government’s limited authority over issues such as whether businesses closed altogether, or operate during limited hours, or how their customers should behave, the reopening decisions were overwhelmingly taken at the state and local level.

But as known by RealityChek regulars, President Biden’s remarks ignore a more fundamental concern: The kinds of absolute increases touted by President Biden are far from the whole story when it comes to judging economic performance, and can profoundly mislead even factoring out the whopping distortions of the economy created by the CCP Virus. At least as important are relative increases (or decreases) – in this case, because the size of the American workforce keeps changing.

And when the Biden job creation record is presented in terms of percentage increase, it doesn’t look so extraordinary at all. The Washington Post‘s Andrew Van Dam put it perfectly yesterday:

“The 6.4 million jobs gained this year, while a record in absolute terms, represents only a 4.5 percent increase in the workforce. That’s smaller than the 5.0 percent growth seen in 1978, when a much smaller labor force added 4.3 million jobs. In fact, relative to the size of the workforce, it’s only the 11th best calendar year since record-keeping began in 1939.”

Biden’s boasts about the economy certainly aren’t the first issuing from the Oval Office. Indeed, they’re no more exaggerated than TrumpWorld’s repeated claims that, pre-virus, he “helped America build its strongest economy in history.” But they’re also a needed reminder that whoever’s in office – a Democrat or Republican, an establishmentarian or a disrupter – their economic pronouncements are bound to deserve some Pinocchios.       

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

Tags

aerospace, aircraft, aircraft engines, aircraft parts, CCP Virus, chemicals, coronavirus, COVID 19, Employment, Jobs, machinery, manufacturing, medical supplies, NFP, non-farm jobs, non-farm payrolls, non-metallic mineral products, Omicron variant, paper and paper products, personal protective equipment, pharmaceuticals, plastics and rubber products, PPE, private sector, semiconductor shortage, semiconductors, surgical equipment, vaccines, Wuhan virus, {What's Left of) Our Economy

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: Steady as She Goes for U.S. Manufacturing Employment

Tags

737 Max, aerospace, aircraft, aircraft engines, aircraft parts, appliances, automotive, Biden administration, Boeing, Build Back Better, CCP Virus, China, computer and electronics products, coronavirus, COVID 19, electrical equipment, Employment, fabricated metals products, Federal Reserve, food products, Jobs, Labor Department, machinery, manufacturing, miscellaneous durable goods, miscellaneous non-durable goods, NFP, non-farm payrolls, Omicron variant, personal protective equipment, pharmaceuticals, PPE, private sector, stimulus, surgical equipment, vaccines, Wuhan virus, {What's Left of) Our Economy

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: A Strong Fall Kickoff for U.S. Manufacturing Employment

Tags

aircraft, aircraft engines, aircraft parts, aluminum, automotive, Boeing, CCP Virus, coronavirus, COVID 19, Employment, fabricated metals products, health security, Jobs, machinery, manufacturing, manufacturing trade deficit, metals, metals-using industries, NFP, non-farm payrolls, personal protective equipment, pharmaceuticals, PPE, private sector, semiconductor shortage, steel, supply chains, tariffs, Trade, vaccines, Wuhan virus, {What's Left of) Our Economy

Although the disappointing official September U.S. jobs figures released this morning might have been depressed significantly by “strange [CCP Virus-related] statistical quirks around school reopening,” it’s still noteworthy that manufacturing employment rose nicely during the month – by 26,000 workers. These results are all the more impressive given all the supply chain and semiconductor shortage headwinds faced by domestic industry, especially in the automotive sector.

Moreover, revisions of the strong July and August payroll figures for U.S.-based manufacturers were only slightly negative, with the former’s upgraded 52,000 sequential gain now judged to be 57,000, and August’s initially reported 37,000 improvement downgraded to 31,000.

As a result, in September, domestic industry closed still more of the gap that had opened up in its hiring performance versus that of the total American non-farm sector (the government’s definition of the U.S. employment universe, which includes government jobs), although it lost some additional ground against the private sector.

According to this latest jobs report, manufacturing had regained 74.51 percent of the 1.385 million jobs it lost during the steep pandemic-related recession of March and April, 2020 – up from the 72.71 percent reported in the August jobs release. That’s a faster rate of improvement than for the non-farm sector (whose payroll recovery grew from 76.60 percent of jobs lost during that early spring of 2020 to 77.77 percent) but slower than that of the private sector (which has now seen an 80.71 percent employment recovery from the spring, 2020 lows – up from 78.72 percent).

It’s certainly plausible that the non-farm jobs recovery has been most recently held back by those school reopening problems, and therefore manufacturing’s laggard status will resume once they’re cleared up. At the same time, the relatively slow industry employment rebound is also explained by its superior jobs performance during the CCP Virus recession. Specifically, its payroll levels fell then by 10.82 percent, versus 16.46 percent for private employers and 17.18 percent for the non-farm sector.

And indeed, since February, 2020 (the last full data month before the pandemic and related lockdowns and behavior changes began seriously distorting the economy), manufacturing’s share of non-farm jobs has risen from 8.39 percent to 8.43 percent. In addition, it’s increased as a share of private sector jobs fromThe 9.87 percent to 9.91 percent.

Among the manufacturing sector categories broken out in the official monthly U.S. jobs reports, the biggest September employment winners were fabricated metals products (up 8,200 on month – its best performance since March’s 10,100 jump); machinery (a 6,300 sequential advance); printing and related support activities (4,200 – its best since March’s 5,300); and food products (up 3,500).

Strong machinery hiring is always particularly encouraging, as the sector’s products are used so widely in the rest of manufacturing, as well as in big non-manufacturing industries like construction and agriculture. Almost as important, whereas its August monthly job creation was previously reported as having flatlined, now its estimated to have climbed by 2,600. And fabricated metals products good recent jobs increases are noteworthy given the continuing U.S. tariffs on the steel and aluminum on which they rely so heavily – which supposedly are decimating metals-using industries.

The aforementioned U.S. vehicles and parts-makers were by far the biggest monthly jobs losers recorded in the September release, shedding 6,300 positions on month. That sequential drop was their worst since semiconductor shortage-induced layoffs plunged their employment levels down by 41,600 in April. No other major manufacturing category mentioned in the September jobs report lost more than 800 jobs.

The most detailed employment data for pandemic-related industries is one month behind those in the broader categories, but their job creation performance remained mixed in August.

In surgical appliances and supplies (the sector containing PPE – personal protective equipment – and similar goods), payrolls fell by 2,500 – their worst monthly performance since the previous August’s identical number. July’s 500 sequential jobs gain was upgraded to 900 and June’s 500 improvement remained the same, but jobs in these industries are now just 7.03 percent more numerous than in pre-pandemic February, 2020. As of last month’s jobs report, the figure was 9.22 percent.

The overall pharmaceuticals and medicines industry saw hiring dip by 400 in August – its worst monthly result since May’s 300 decrease. July’s job gains were revised up from 400 to 500, but June’s losses remained at a downgraded 2,300.

These sectors’ payrolls, therefore, have now risen by only 4.62 percent since February, 2020 – not the 4.72 percent published last month.

The pharmaceuticals subsector containing.vaccines fared better. Employment rose by 400 sequentially in August, July’s flatline was upgraded to an increase of 200, and June’s 1,000 jobs improvement remained unrevised. Whereas as of last month, this sector’s payrolls had grown by 10.21 percent since just before the pandemic hit, that figure is now 10.82 percent.

U.S. aircraft producer Boeing continues to suffer from manufacturing and quality problems, but jetliner employment inched up on month in August anyway – by 200. But July’s 1,500 sequential jobs decline was revised down to 1,600, while June’s upwardly revised 4,700 jump remained the same. All told, aircraft employment is now down by 8.04 percent since February, 2020 – a bit better than the 8.08 percent shortfall reported in last month’s jobs report.

The story was similar in aircraft engines and engine parts. These industries added 600 workers seqentially in August, and July’s previously reported payroll increase of 200 is now estimated at 300. June’s downgraded 400 jobs gain was unrevised, and so employment in these sectors is now off by 14.04 percent since February, 2020 – some progress over the 14.80 percent reported last month.

Non-engine aircraft parts and equipment are still stuck even deeper in the doldrums. August’s 500 jobs loss drove its payrolls down to 16.60 percent lower than in February, 2020, versus the 16.17 percent drop reported as of last month.

With manufacturing employment still powering ahead even with its supply chain issues (which reportedly don’t seem likely to end till sometime next year), and with the CCP Virus threat still hanging over the economy, betting against more of the same going forward seems foolish. And interestingly, industry’s jobs prospects look bright despite signs that its mammoth trade deficit is heading back up, at least in absolute terms. (We don’t yet have recent enough figures to know whether it’s rising in relation to manufacturing output, which is the much more important measure.)

As they say in the investment world, past performance is no guarantee of future results.  But domestic manufacturing’s recent employment performance has overcome so many obstacles over the past year-plus that it might be the best basis we have right now for prediction.  

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

Tags

aerospace, aircraft, aircraft engines, aircraft parts, appliances, automotive, Boeing, CCP Virus, China, coronavirus, COVID 19, Delta variant, electrical equipment, Employment, fabricated metal products, food products, healthcare goods, Jobs, logistics, machinery, manufacturing, medical equipment, metals, non-farm payrolls, pharmaceuticals, plastics and rubber products, PPE, private sector, semiconductor shortage, supply chains, tariffs, transportation, vaccines, {What's Left of) Our Economy

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: The Revisions Outshone the New U.S. Manufacturing Jobs Gains

Tags

aircraft, aircraft engines, aircraft parts, appliances, automotive, Boeing, CCP Virus, China, coronavirus, COVID 19, Delta variant, electrical equipment, Employment, fabricated metals products, Jobs, Labor Department, machinery, manufacturing, medicines, metals, miscellaneous durable goods, NFP, non-farm payrolls, personal protective equipment, pharmaceuticals, PPE, recovery, tariffs, Trade, vaccines, Wuhan virus, {What's Left of) Our Economy

Although U.S. manufacturers grew their payrolls by a solid net 27,000 in July, according to the Labor Department’s new jobs report for the month, the big story for industry lies in the June revisions. As often the case during the CCP Virus era, moreover, these were dominated by the automotive sector.

Specifically, June’s initially reported monthly 15,000 manufacturing jobs increase was boosted all the way up to 39,000. And the automotive numbers for June executed a stunning turnabout – from an estimated loss of 12,300 to a gain of 2,700. By contrast, net hiring in the vehicles and parts sectors for July was a quiet 800.

The May manufacturing employment revisions were less dramatic – from an increase 39,000 to one of 36,000. But that month had already witnessed its own huge revision – from an initially reported 23,000 to that 39,000.

Outside automotive, the June revisions were widespread through manufacturing, led by electrical equipment and appliances, whose employment increase that month was upgraded from 1,700 to 3,600. (Its July net job creation was a mere 200.)

Even with the strong revisions, though, manufacturing’s recent status as a U.S. recovery employment laggard continued. As of July, domestic industry had regained 952,000 (68.74 percent) of the 1.385 million net jobs lost in March and April of 2020. The numbers for the private sector overall are 76.96 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) 74.50 percent of the 22.362 million jobs lost.

One reason, of course, is that manufacturing employment suffered less than payrolls in the rest of the economy in the early spring of 2020. 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.

At the same time, U.S.-based industry is still benefiting from stiff tariffs on metals and goods from China, and like the entire economy, is being supported by massive government stimulus along with skyrocketing vaccine production. This puzzle may be explained by the bottlenecks and resulting shortages plaguing all industries, and by the introduction of labor-saving equipment and other restructuring to substitute for the workers so many manufacturers claim are so hard to find. But as I wrote in last month’s examination of the June jobs report, I’m not completely convinced yet by either explanation.

The biggest July manufacturing employment winners by far of the major industry categories used by the U.S. government were machinery (6,800), miscellaneous durable goods (5,500), and fabricated metals products (4,500).

The performance of the first two is especially encouraging, since machinery’s products are used so widely throughout the entire economy (and since robust hiring therefore signals widespread overall strength and healthy capital spending); and since miscellaneous durable goods includes the personal protective equipment (PPE) and other medical supplies whose importance has been underscored by the pandemic.

Indeed, as a result of their July jobs gains, machinery employment has risen to within 3.30 percent of its immediate pre-pandemic level (in February, 2020), and the comparable figure for miscellaneous durable goods is 1.09 percent higher. (More on the performance of its PPE-including category will be presented below.) Both figures are better than that for manufacturing overall, whose payrolls are still 3.38 percent lower than just before the CCP Virus began significantly affecting the economy.

The only July manufacturing jobs losers suffered overwhelmingly fractional sequential setbacks, led by transportation equipment overall (the category containing automotive, where employment sank by 1,500) and semiconductors and electronic components, where global shortages undoubtedly had much to do with its job loss of 800.

Returning to the pandemic-related industries, where the data are one month behind, the picture in surgical appliances and supplies (the sector containing PPE) is dominated by a big downgrade in the May numbers – from a gain of 1,700 to a loss of 900. And in June, 500 more positions were shed. As a result, employment in this crucial national health security sector has fallen to 7.60 percent above immediate pre-pandemic levels.

In the overall pharmaceuticals and medicines industry, a slightly upgrade of May’s originally reported 400 job loss (to a drop of 300) was followed by a June rise of 2,700 – the biggest monthly advance since September, 2019’s 3,500 (well before the CCP Virus arrived). Its employment levels have consequently climbed to 4.72 percent above their February, 2020 figure.

The pharmaceuticals subsector containing vaccines showed continued good job growth, with May’s unrevised 1,000 improvement followed by an identical June increase. This industry now employs 10.20 percent more workers than just before the pandemic.

Aircraft employment levels have fluctuated wildly recently, due surely to the constant barrage of news both good and bad about Boeing. May’s 5,500 job plunge – the worst such performance since June, 2020’s 5,800 shrinkage – was followed by a June gain of 4,500. That’s its best hiring month since the same number of workers was added in July, 2012. But aircraft employment is still 7.55 percent less than in February, 2020, when the pandemic’s spread globally decimated air travel worldwide. On a more positive note, however, Boeing seems to believe the worst is over.

Aircraft engines and parts employment has been much more stable than aircraft’s, and these industries added 500 workers in total in June. But their payrolls are 14.91 percent smaller than in February, 2020 – nearly twice as big a proportional drop as in aircraft.

What’s next for domestic manufacturing employment? Last month I saw plenty of sources of uncertainty, ranging from bottlenecks to the infrastructure legislation to China tariff policy. Now there’s the virus’ hyper-contagious (but so far less harmful) Delta variant to contend with, and all the resumed lockdowns and other economic activity restrictions it could portend – along with the related likelihood of continued strong and even greater vaccine demand (though the sector isn’t big enough to move the national manufacturing jobs needle much).

I’m still most impressed by how all the national and regional surveys keep showing that manufacturers themselves see a still-brightening future ahead. (See, e.g., here and here.) After all, they’re the ones with skin in the game. Let’s hope they’re right. 

(What’s Left of) Our Economy: Springtime Blahs for U.S. Manufacturing Jobs

Tags

aerospace, aircraft, appliances, automation, automotive, Boeing, CCP Virus, coronavirus, COVID 19, Employment, fabricated metal products, Jobs, Labor Departent, machinery, manufacturing, masks, metals tariffs, non-farm business, non-farm payrolls, pharmaceuticals, PPE, productivity, protective gear, regulatory policy, tariffs, tax policy, vaccines, Wuhan virus, {What's Left of) Our Economy

In contrast to the mixed set of signals I saw being given off by last month’s official monthly U.S. jobs report (for April), today’s May figures are pretty clearly indicating that manufacturing hiring is in a weak patch. In fact, the patch has been weak enough to turn the sector from a national employment creation leader to a laggard. Just as important, the short-term outlook at least seems somewhat dimmer than it had been.

The main reason for confusion over the previous data had to do with the disconnect between the automotive-heavy losses of April (which accounted for more than all of that month’s initially reported 18,000 net job decrease) and the positive revisions for the preceding months. Another very encouraging sign – the second straight month of strong jobs gains for the machinery sector, whose products are used widely not only in the rest of manufacturing, but in other major parts of the economy like agriculture and construction.

May’s results were almost a mirror image – and not in a good way.

For example, whereas in April, the 27,000 sequential automotive job losses exceeded total manufacturing job loss of 18,000 (leaving the rest of industry’s hiring performance pretty subdued, to be sure), in May, automotive payrolls rose by 24,800. But overall manufacturing job gains totaled only 23,000 – so the rest of the sector shed workers on net.

In addition, revisions are now negative. April’s manufacturing employment is now judged to have fallen by 32,000 month-to-month, not 18,000. That’s largely because that month’s automotive layoffs were much bigger than first reported – 37,700 rather than 27,000. Even March’s very good upwardly revised monthly hiring surge of 54,000 has now been revised down again to 51,000.

As for machinery, that crucial industry lost 4,700 jobs on net in May – its worst results by far since April, 2020 – at the depths of the CCP Virus-induced downturn and the first negative number since January. Moreover, this April’s 3,700 monthly jobs increase has now been revised down to 1,900, and March’s last upgraded 5,400 figure is now pegged at only 3,500.

In all, manufacturing has now regained 876,000 (64.27 percent) of the 1.363 million jobs it lost at the pandemic’s height in the spring of 2020. That’s now well behind the 69.74 percent employment recovery of the private sector and even the 65.88 percent rebound of the total economy (defined as the non-farm sector by the U.S. Labor Department, which compiles and categorizes the data).

The manufacturing sectors with the biggest sequential May jobs gains were the overall transportation equipment sector (where a 9,000 hiring improvement was propped up by the automotive increases), miscellaneous non-durbable good makers (up 4,100), fabricated metals products (up 3,500) miscellaneous durable goods manufacturing (a catch-all category including everything from surgical equipment – like facemasks and other personal protection equipment to gaskets to jewelry – where payrolls were up 3,400), and computer and electronics products and electrical equipment and appliances (up 2,800 each).

The hiring in fabricated metals and appliances was noteworthy given that companies in both industries have been complaining loudly about the pain they’ve been suffering from higher metals prices stemming in part from ongoing U.S. tariffs on these materials. (See, e.g., here and here.)

May’s big manufacturing jobs losers aside from machinery were non-metallic mineral products (down 2,200), paper and paper products (down 2,100), and the big chemicals sector, which is another big supplier of a wide variety of products to the entire economy (down 1,100).

More encouragingly, when it comes to industries closely related to the fight against the pandemic, job creation seems picking up, although the relevant data are one month behind the rest of the jobs figures. Specifically, in the surgical appliances and supplies sector that includes the protective gear, March’s employment increase was unrevised at 900, and hiring accelerated to 1,200 in April – the best monthly performance since September’s 1,600. This sector’s payrolls are now 10,400 (9.89 percnt) higher than in February, 2020 – the last pre-pandemic month.

For pharmaceuticals and medicines overall, March’s 1,500 sequential jobs increase was revised up to 1,600, and April hiring surged to 2,700 – its best performance by far of the CCP Virus period. Its payrolls are up by 12,500 (4.01 percent) since pre-pandemicky February, 2020.

For the pharmaceuticals subsector containing vaccines, March’s initially reported employment increas of 500 is now judged to be 800, and net hiring grew by 1,300 in April – a solid improvement by this industry’s recent standards. As a result, its workforce has now increased by 9,200 (9.30 percent) since February, 2020.

The same unfortunately can’t be said for the aerospace industry, and continuing and even mounting troubles for Boeing presage ongoing woes for the foreseeable future. March’s initially reported 1,800 monthly job loss for aircraft has now been revised for the worse to 1,900, and the sectors workforce fell by another 200 in April. Meanwhile, following sequential March losses in aircraft engines and parts, and in non-engine aircraft parts, employment flatlined in these two sectors combined in April.

Continued strength in the overall recovery of the U.S. economy should provide strong tailwinds for domestic manufacturers and for industry’s jobs figures, and continuing tariffs should help by keep much foreign competition (especially from China) out of the market.

Vaccine production will likely keep expanding – and requiring more workers – as well, mainly to supply immense foreign demand. But the sector is so small that its employment performance can’t move the manufacturing jobs needle much.

Boeing’s problems, however, can be expected to cast a big shadow not only over the big aerospace industry, but over its big domestic supply chain as well. And although the global semiconductor shortage that has hit the automotive sector especially hard may be starting to ease, the damage appears likely to take considerably longer to overcome. Manufacturers face big questions about the future of U.S. tax and regulatory policy, too.

Recently, moreover, some data’s come out pointing to a development that might wind up strengthening domestic industry in toto, but weakening its employment potential, at least in the short run. Labor Department figures show that, from the depths of the pandemic through the first quarter of this year, U.S.-based manufacturing has boosted its labor productivity much faster than the non-farm economy generally — and much faster than it has since its recovery from the last recession.  In other words, manufacturers lately been improving their ability to turn out product more than they’ve increased hiring. 

Whether this is a secular change or whether industry will revert to its recent mean is anyone’s guess. Also highly uncertain is whether better productivity growth (including of course more use of labor-saving technologies) will wind up destroying jobs on net, or increasing them by supercharging production. So far history seems to teach that such advances are net employment creators, but is that inevitable going forward? And is it inevitable for manufacturing specifically? All I can say is “Stay tuned” and “Be patient.”          

(What’s Left of) Our Economy: A Winning Streak Broken But a Still Encouraging Outlook for Manufacturing Jobs

Tags

aerospace, Biden, CCP Virus, China, coronavirus, COVID 19, Donald Trump, Employment, healthcare goods, Jobs, Labor Department, machinery, manufacturing, NFP, non-farm payrolls, pharmaceuticals, PPE, tariffs, vaccines, Wuhan virus, {What's Left of) Our Economy

U.S. manufacturing’s eight-month streak of hiring gains ended in January, with industry shedding 10,000 jobs from December’s levels. Also dimming the results reported for the sector in this morning’s offiical employment figures were moderately negative revisions. Moreover, despite the CCP Virus emergency, and the vaccine production ramp up, job creation in health care-related manufacturing (where the most detailed figures only go up to December) remained disappointing.

Although the manufacturing jobs revisions for November and December weren’t nearly as great as the unusually large changes for the Labor Department’s overall U.S. jobs universe (called “non-farm payrolls”), they still weakened the employment outperformance recorded by the sector since job levels bottomed out in April.

December’s originally reported on-month manufacturing jobs increase was downgraded from 38,000 to 31,000. And although the November data saw their second upward revision (from 27,000 to 35,000 and now to 41,000), the findings for October fell all the way from 43,000 to 32,000. (They were originally reported as 33,000.)

The January numbers mean that manufacturing has regained 58.91 percent (803,000) of the 1.363 million jobs it lost during the pandemic’s first wave and resulting sweeping lockdowns in March and April.

That pace is now slightly behind that of the total private sector, which since April has recovered 60.34 percent (12.788 million) of the 21.191 million jobs lost last spring.

But manufacturing’s employment is still faring better than the total non-farm sector (which includes hard hit state and local governments). Overall, as of January, the economy has regained just 56.27 percent (12.47 million) of the 12.321 million jobs lost in March and April.

Despite decreasing in toto in January, employment in some manufacturing sectors nonetheless improved. These winners were led by the big chemicals industry (up 10,500), food products (2,200), and miscellaneous durable goods, computer and electronics products, and wood products (up 1,300 each). Within the computer sector, payrolls in semiconductors and related devices rose by 1,800.

January’s biggest losers were non-metallic mineral products (down 6,400), automotive (off by 5,300), fabricated metals products (a 4,100 loss), and electrical equipment and appliances (down 3,200).

Unfortunately, given its importance as an equipment supplier to the manufacturing sector and other important U.S. industries, employment in machinery declined by 700 on month in January, and revisions were deeply negative.

Also discouraging were the most recent jobs figures for healthcare-related manufacturing, especially given the vaccine progress and months of national alarm about dangerously inadequate domestic production of these critical goods.

Generally, employment increases continued, but the pace remains sluggish. For example, the broad pharmaceuticals and medicines sector added 2,200 jobs in December, and revisions were slightly positive. But payrolls here have grown by a mere 2.09 percent since February – the last month before the virus’ health and economic impact began to be fully felt.

Employment advanced again in December in the sub-sector containing vaccines. But about half of the sequential increase of 1,100 was offset by downward revisions for October and November. And this sub-sector’s total headcount is up just 4.35 percent since February.

The opposite pattern was seen in the manufacturing category containing personal healthcare-related protection devices (PPE) like facemasks, gloves, and medical gowns. Its payrolls rose fell by 400 sequentially from November to December, but revisions for the previous two months rose by the same miniscule total. Still, this industry’s 8.08 percent job growth since February led healthcare manufacturing by a wide margin.

Despite January’s setback, a reasonable case can be made that manufacturing’s employment prospects still look bright for several reasons. Progress will surely keep being made on the PPE front. Vaccine production is set to surge. A large aerospace sector long hobbled by Boeing’s safety woes is seeing the company’s troubled 737 Max model being recertified for flight by more and more countries. Any national and global recovery will see demand for air travel revive.  And because President Biden has decided to keep Donald Trump’s steep, sweeping tariffs on imports from China in place for the time being. Consequently, industry can be expected to supply more U.S. demand than usual as the economy returns to normal however quickly or slowly.

(What’s Left of) Our Economy: More Manufacturing Jobs Strength – & Vindication of Trump Tariffs

Tags

737 Max, aerospace, automotive, Boeing, CCP Virus, China, coronavirus, COVID 19, Employment, Jobs, machinery, manufacturing, manufacturing jobs, non-farm payrolls, pharmaceuticals, PPE, private sector, tariffs, Trade, trade war, Trump, vaccines, Wuhan virus, {What's Left of) Our Economy

This morning’s official U.S. jobs report, for December, shows that, to paraphrase that unforgettable battery ad slogan, domestic manufacturing just keeps hiring and hiring and….

As a result, the December data also add to the already compelling case that domestic industry’s continued resilience – including an ongoing hiring out-performance – owes significantly to the Trump tariffs that have prevented imports from China from flooding U.S. markets and massively depriving Made in America products of customers as they had before his presidency.

The nation’s manufacturers boosted their payrolls by 38,000 on month in December, even as the private sector shed 95,000 jobs and government at all levels lost 45,000.

Moreover, in line with the strong overall employment revisions for October and November, industry’s previously reported 33,000 hiring improvement for the former (which had already been downgraded from 38,000) is now judged to be 43,000. And November’s figure has been upgraded from 27,000 to 35,000.

Although this performance pales compared with the 333,000 jobs added in manufacturing in June, the sector continues to punch above its employment weight, and in fact has now won back a status it apparently had lost in the fall.

As of December, U.S.-based industry had regained 60.16 percent (820,000) of the 1.363 million jobs it had lost during the worst (so far) of the pandemic-induced downturn in March and April.

That’s slightly ahead of the total private sector, which has recovered 59.91 percent (12.696 million) of its 21.191 million drop last spring.

And its considerably ahead of the overall economy’s record. Non-farm payrolls (the definition of the American employment universe used by the Labor Department, which issues these jobs reports) have risen by 12.321 million since April, a bounceback reprsenting only 55.60 percent of their 22.160 million plunge that month and in March.

The big reason is the slump in government jobs at all levels, and especially in states and localities. Public sector employment sank by 45,000 sequentially in December and by 81,000 the month before. And the outlook for public sector employment remains clouded by the brightening (due to the nearly final 2020 election results) but still uncertain prospects for a federal bailout of state and local governments, whose December monthly job losses totaled 49,000. (The federal government actually added positions.)

Manufacturing’s biggest monthly employment winners in December were plastics and rubber products (up 6,900), the automotive sector (6,700), non-metallic mineral products (6,100), food manufacturing (5,500), and apparel (4,000).

Especially encouraging were the 2,800 jobs created by domestic machinery makers, since the equipment they make is so widely used throughout the rest of manufacturing and elsewhere in the economy. November’s on-month machinery jobs gains were revised up from 1,900 to 2,500, but October’s totals were revised down for a second time, from 3,000 to 2,700.

December’s biggest manufacturing job losers were miscellaneous non-durable goods (down 11,200 sequentially) and primary metals (down 2,100).

Also on the encouraging side: Better progress has been made in job-creation for the CCP Virus-related medical manufacturing categories. These only go through November, but they show that the the broad pharmaceuticals and medicines sector added 1,000 new jobs that month, and its October figure was upgraded all the way from 100 to 1,100.

In addition, the sub-sector containing vaccines increased payrolls in December by 1,100, and its October performance was revised up from 600 to 1,100.

But in the manufacturing category containing PPE goods like face masks, gloves, and medical gowns, along with cotton swabs, the previously reported October employment increase stayed unreivsed at 400, and the November growth was only 500.

These results, however, still mean that the PPE category’s job gains since February have been much stronger (7.85 percent) than those of the vaccines category (a disappointing 2.82 percent) and of the broader pharmaceuticals industry (an even weaker 1.40 percent).

Finally, other than the prospect of a vaccine-related return to normal in the U.S. and global economies (for domestic manufacturing is a big exporters), the biggest reason for further manufacturing employment optimism concerns the aerospace sector. It’s been pummeled by both the pandemic-induced nosedive in air travel around the world, and by Boeing’s safety woes.

The U.S. aerospace giant isn’t out of the woods yet. Its troubled 737 Max model has now been recertified by the federal government as safe to return to flight, but new production-related problems have cropped up, too. Moreover, who can say with any confidence when “normal,” or enough of it to help, Boeing, returns?

Yet assuming some substantial Boeing recovery in the foreseeable future, a major restart of its own manufacturing could give a big boost to domestic industry as a whole, given its many and long domestic supply chains.

(What’s Left of) Our Economy: October Costs Manufacturing Some Jobs Momentum

Tags

(What's Left of) Our Economy, automotive, CCP Virus, coronavirus, COVID 19, election 2020, Employment, fabricated metal products, food products, Jobs, Joe Biden, machinery, manufacturing, metals, motor vehicle parts, NFP, non-farm jobs, non-farm payrolls, private sector jobs, recession, regulation, tariffs, taxes, Trade, transportation equipment, Trump, Wuhan virus

The manufacturing jobs picture revealed in this morning’s October official U.S. jobs report was a classic glass-half-empty/half-full story. But for the first time since the employment rebound from its CCP Virus-induced lows, the gloomier view seems to have the edge – though a modest one. The main reason: In October, the rate of cumulative manufacturing job creation fell slightly behind that of the U.S. government’s entire employment universe (so-called non-farm payrolls, or NFP), and of the private sector.

Domestic industry increased its employment level on net by 38,000 in October on a sequential basis. That figure represented a decrease from the September total – which has been revised down from 66,000 to 60,000. But it’s an improvement over August’s also downwardly revised 30,000 total.

In addition, as opposed to dominating the manufacturing jobs picture for good and ill, as it has during the pandemic recovery period, automotive jobs, rose by a mere 1,400. The downward revision in combined vehicle and parts payrolls in September, however (from 14,300 to 7,700) did account for more than all of the total downward manufacturing revision for the month.

October’s manufacturing net jobs-creation leaders were fabricated metals products (7,200), food manufacturing (6,200), primary metals (6,000), and machinery (3,900). The first two categories enjoyed their second straight month of relatively strong job improvement, while the primary metals gain amounted to an important turnaround from September’s 3,400 net employment loss.

At the same time the October machinery results – important because that sector influences so much manufacturing activity overall, and because of its close connections to non-manufacturing industries like agriculture and construction) – were much less impressive than the 12,600 employment rise of September. Worse, this figure itself was downgraded from the initially reported 13,800.

The only significant October jobs loser in manufacturing was transportation equipment. This large category – which includes automotive – shed 2,400 jobs on net. The big problem here was motor vehicle parts, where employment fell by 2,800.

October’s employment progress means that manufacturing overall has regained 742,000 (54.44 percent) of the 1.363 million jobs it lost during the worst of the CCP Virus economic slump of March and April. (Those earlier job losses represented 10.61 percent of the last pre-virus – February – manufacturing employment level.)

As of October, non-farm payrolls total had regained 12.070 million (54.47 percent) of the 22.160 million total decrease they suffered in March and April. So although by this definition, overall U.S. employment plunged by 14.53 percent during the virus low point – more proportionately than manufacturing) — the rate of its jobs rebound is now slightly faster.

Faster still has been the bounceback in private sector jobs. Non-government employment (whose status is much more revealing of the economy’s fundamentals than government employment) fell by 21.191 million in March and April combined – greater relative losses (16.34 percent) than experienced either by manufacturing or the non-farm sector. But its strong October performance mean that it’s regained 12.317 million of these position on net – an increase of 58.12 percent.

But as if the CCP Virus and its decimation of the economy haven’t created enough uncertainties for manufacturing employment (and for the economy as a whole), this week’s Election 2020 results could further muddy the waters – especially if the White House changes hands. Despite October’s jobs slowdown, industry’s employment and output have held up well, due no doubt significantly to President Trump’s tariff-centric trade policies and domestic overhauls in taxes and regulations. The Trump manufacturing record pre-virus has also been strong. Would a Biden administration reversal of these moves put U.S. manufacturing back behind the eight-ball? Or would it find new alternative growth fuels for industry?