American domestic manufacturing extended its jobs recession in April, with the 4,000 sequential net increase not nearly big enough to prevent a net employment decline that now stretches back to January, 2015. April’s performance represented the sector’s first monthly improvement since January.
Yet even though industry has lost 14,000 net jobs over the last 15 months, the sector’s wages jumped by 0.70 percent in April over March’s upwardly revised level and by 3.02 percent year on year. The former increase was the biggest since recessionary November, 2008 and the latter the biggest since October, 2009 – when employment was still falling. At the same time, manufacturing jobs as a share of total non-farm jobs hit a new all-time low in April (8.54 percent), and revisions of prior months’ poor sequential job creation figures were only 2,000 to the upside.
Here’s my analysis of the latest monthly (April) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
>American domestic manufacturing increased its employment levels by 4,000 on net in April – its first monthly increase in two months. But the figures still mean that the sector’s jobs recession extended into its fifteenth month – its longest since the Great Recession – with employment down on net since January, 2015 (by 14,000 jobs).
>Yet the April figures also show the biggest monthly and yearly manufacturing wage increases since the Great Recession and its immediate aftermath.
>On month, April current-dollar manufacturing wages rose by 0.70 percent – the strongest such performance since November, 2008 (0.71 percent), when the economy was still slumping.
>The year-on-year April manufacturing wage increase of 3.02 percent was the biggest annual wage rise since October 2009 (3.03 percent) – when the economy was only four months into its current recovery, and when manufacturing employment was still falling on net.
>During those recessionary and early recovery days, anecdotal evidence suggested that manufacturing companies were reducing payrolls by laying off their least experienced, and lowest paid workers – thus resulting in statistical wage increases. Similar moves could explain the new disparity between employment and compensation trends.
>According to the April figures, manufacturing’s share of total non-farm employment (the Labor Department’s U.S. employment universe) hit its latest new record low – 8.54 percent. The previous new record – 8.55 percent – was set in March.
>This morning’s revisions to the March and February manufacturing job changes were positive, but minimal. March’s 29,000 monthly loss – the worst since the 34,000 decrease in December, 2009 – remained unchanged, but February’s previously reported 18,000 payroll reductions were revised upward to 16,000.
>April’s manufacturing job results also produced the second straight month of year-on-year employment contraction. Since April, 2015, the sector’s payrolls have shrunk by a net total of 19,000. March’s annual manufacturing job losses were revised from 28,000 to 25,000, but February’s previously reported 5,000 yearly job shrinkage was revised up to growth of 7,000.
>Between April, 2014 and April, 2015, manufacturing gained 177,000 jobs and the comparable March improvement was 193,000.
>Since manufacturing hit its 2010 employment bottom, the sector has regained 844,000 (36.81 percent) of the 2.293 million jobs it lost during the recession and its aftermath. By contrast, the private sector overall lost 8.801 million jobs from the recession’s December, 2007 onset through its February, 2010 absolute employment low. Since then, it has increased net employment by a 14.581 million.
>In fact, whereas total private sector employment is now five percent higher than at the recession’s beginning, manufacturing employment is still 10.54 percent lower.
>The manufacturing wage figures in the new jobs report also compared favorably with the data from the private sector overall. April’s 0.70 percent monthly rise in manufacturing wages more than doubled the 0.31 percent improvement for private sector as a whole.
>Manufacturing’s 3.02 percent year-on-year April wage rise also handily beat the private sector’s 2.49 percent – itself a strong gain.
>Manufacturing wages are also showing impressive momentum. The April annual manufacturing wage increase was much higher than March’s 2.47 percent, which itself was upwardly revised. That March rise, in turn, beat February’s 2.44 percent. January’s year-on-year wage performance was better, however – 2.52 percent.
>Longer term, manufacturing’s wage-laggard status remained intact, but the gap with the private sector has been narrowing. Since the current economic recovery began, in mid-2009, its pre-inflation wages are up less (12.51 percent) than overall private sector wages (15.31 percent).
>Examining manufacturing’s inflation-adjusted wages reveals similar trends. The latest Labor Department figures are from March and show that its monthly increase in manufacturing wages was stronger (0.28 percent) than that of the private sector overall (0.19 percent).
>Year-on-year, March real manufacturing wages were up 1.60 percent, versus 1.52 percent for the private sector.
>Yet since the recovery began in mid-2009 – nearly seven years ago – inflation-adjusted manufacturing wages have risen only 0.84 percent. Real private sector wages have increased four times faster – by 3.78 percent.