(What’s Left of) Our Economy: New U.S. Pay Figures Show a Recent Fade – Especially in Manufacturing

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benefits, compensation, ECEC, employer costs, salaries, Trump, wages, {What's Left of) Our Economy

This morning the federal government released one of the more unusual takes on Americans’ pay that we regularly see – the latest quarterly report on “Employer Costs for Employee Compensation (ECEC).” It’s unusual because it measures not only wages and salaries, but non-wage benefits. And that’s something of a two-edged sword.

On the one hand, the ECEC series’ comprehensiveness provides a fuller picture of compensation trends in the U.S. labor market than the wage figures alone (which come out monthly, and therefore are somewhat more current). On the other, because it focuses (as per the name) on compensation from the employer’s end, it includes a great deal of info on practices that never translate into money in their workers’ pockets. After all, few if any workers realize the full value of their benefits packages.

The ECEC series presents analysts with another problem: the current-dollar data only go back to 2004. So it’s not possible to compare the economy’s performance on this front over similar phases of the various recent business cycles.

Even so, three important conclusions can be drawn from the latest data – which takes the story up to full-year 2018. First, they confirm what the wage statistics reveal about manufacturing being a compensation laggard during the current economic recovery compared with the rest of the private sector (I exclude government employee data from this post because compensation decisions in the public sector are set mainly by politicians’ decisions, as opposed to market forces. As a result, they say relatively little about the fundamental state of the economy.)

Second, they show that for both private sector (PS) workers as a whole and manufacturing workers, wages and salaries have been growing more slowly than benefits. And third, they show that increases in all these forms of compensation for both private sector and manufacturing workers slowed somewhat during the second year of the Trump administration, and that the improvement for manufacturing workers essentially halted the year before – and in some cases, shifted into reverse.

Here are figures for compensation cost changes for the duration of the current expansion – which began in mid-2009:

Total compensation for all PS workers:                     +24.18 percent

Total compensation for manufacturing workers:       +21.97 percent

Wages and salaries for all PS workers:                      +23.00 percent

Wages and salaries for manufacturing workers:        +20.59 percent

Total benefits for all PS workers:                              +27.18 percent

Total benefits for manufacturing workers:                +24.56 percent

If you do a little more math, you’ll see that private sector compensation costs generally advanced at a rate 10.06 percent faster than total compensation in manufacturing; that private sector wages and salaries costs went up 11.70 percent faster than their manufacturing counterparts; and that benefits costs rose 10.67 percent faster.

Now let’s look at the annual changes in each variety of compensation costs since 2009. The figures show changes between the fourth quarters of each year, and if you look at the 2016-17 data and the 2017-18 data, you see the growth slowdowns and actual backsliding in manufacturing mentioned above.

            PS comp   mfg comp   PS wages  mfg wages  PS bens   mfg benefits

09-10:   +1.20%    +0.94%      +1.18%     +0.14%     +1.38%     +2.52%

10-11:   +2.95%    +2.20%      +2.55%     +1.60%     +3.95%     +3.37%

11-12:   +1.05%    +1.79%      +0.89%    + 2.13%     +1.42%     +1.15%

12-13:   +2.63%    +4.83%     +2.17%     +4.08%      +3.74%     +6.28%

13-14:   +5.70%    +4.52%     +4.62%     +4.36%      +8.23%     +4.84%

14-15:    +1.21%   +4.82%     +1.93%     +4.30%       -0.31%     +5.79%

15-16/;   +3.34%   +2.16%     +3.12%     +2.56%      +3.76%     +1.41%

16-17:    +2.93%    -0.89%     +2.80%      -0.74%      +3.22%     -1.77%

17-18:    +0.98%    +0.28%    +1.62%     +0.63%      -0.49%      -0.44%

Another noteworthy characteristic displayed by these numbers: They can be very volatile. For optimists, this choppiness may be a sign that manufacturing compensation will turn another corner, and that overall private sector compensation will rise at an accelerating rate. They could also explain the relatively weak manufacturing results as a sign that, as has been widely claimed and that I’ve discussed previously, that industry is attracting job-seekers whose qualifications are so threadbare that they can’t command premium wages and benefits even in the currently tight national labor market.

Pessimists can counter by contending that recovery-era compensation increases have surely peaked, either since the expansion will surely peter out soon simply because it’s already lasted so long, or because the boost received from the President Trump’s tax cuts has run its course, or both.

I’ll stay agnostic for now. But I feel pretty confident that if you look at the ECEC figures that start coming out in mid-2020, you’ll have a decent idea of who America’s next president will be.

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(What’s Left of) Our Economy: Manufacturing’s Real Wage Recession Hits Third Birthday

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inflation-adjusted wages, Labor Department, manufacturing, private sector, real wages, wages, {What's Left of) Our Economy

As I’ve written previously, I’m becoming convinced that badly lagging wages for U.S. manufacturing workers stem in part from companies inevitably hiring less and less qualified workers who need lots of time and training to get up to snuff. But that doesn’t mean I have to be overjoyed about it.

So although I remain hopeful that these hiring practices will eventually produce the kind of highly skilled and productive manufacturing workforce the country needs, it seems justified to point out that last week’s Labor Department report showed industry’s inflation-adjusted wages nearing historically awful territory – certainly for an economy that’s expanding. 

The worst news (and the competition was keen): Manufacturing’s real wage recession got longer at both ends. Because constant-dollar hourly pay fell by 0.37 percent on month in January (the worst sequential performance since last August, 2017’s 0.64 percent drop), the downturn not only extended another month. It also pushed back the start date to January, 2016.

In other words, the manufacturing real wage recession just turned three years old. During that period, after-inflation hourly pay has declined by a cumulative 0.09 percent.

Some more (depressing context): If you go back further in the figures, you see that real manufacturing wages haven’t budged at all since February, 2009. That’s nearly ten years of outright stagnation.

In fact, since the current economic recovery began, in mid-2009, inflation-adjusted manufacturing wages have risen by only 0.47 percent.

If you’re desperate for a silver lining, here’s the only one I could find. Manufacturing’s year-on-year real wage decrease was slightly less (0.09 percent), than that between the previous Januarys (0.19 percent). So technically, that’s progress.

Real wage gains for the overall private sector continued to outpace those in manufacturing by a wide margin, especially the longer the time period you examine. On a monthly basis, the private sector’s 0.46 percent December price-adjusted pay hike was revised down to 0.37 percent. But that still beat manufacturing’s (0.37 percent). The same holds for January – when private sector wages after inflation climbed by another 0.18 percent.

On annual basis, the private sector left manufacturing in the dust, real wage-wise. Its January-January 1.68 percent improvement was its best since July, 2014’s 1.81 percent. Moreover, it nearly tripled the constant dollar wage increase of 0.66 percent between January, 2017 and January, 2018.

Worse still, since the current recovery began, real private sector wages are up 5.82 percent. Although not an eye-popper, given that it represents the change over more than nine years, this rate of increase was 12.38 times faster than its manufacturing counterpart – 0.47 percent.

Even worse, the gap is widening. During the recovery through last January, real private sector wages had only risen 7.27 times faster than real manufacturing wages.

If you believe the low-skills explanation for the manufacturing wages’ dismal performance in absolute and relative terms, you could legitimately hope that training and education can turn the picture around. At the same time, if you’re a low-paid manufacturing worker, you could legitimately wonder how much longer some payoff of more knowledge and experience will take.

Making News: A Border Crisis Interview, with Piscopo in the Morning…& More!

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AM 970 The Answer, border security, caravans, Henry George School of Social Science, Immigration, IndustryToday.com, Jobs, Joe Piscopo, Jorge Castaneda, Making News, manufacturing, Mexico, New York Knicks, Smart Talk, State of the Union, wages

What with the State of the Union address and the ongoing Border Wall/government shutdown showdown and the Virginia political scandals, it’s been a more amazing last week or so than usual to be administering RealityCheks to the national scene.  As a result, I’ve fallen behind on tracking media appearances, so in this posting I’ll be catching up.

I’m especially pleased to report that an interview I was recently privileged to conduct with former Mexican Foreign Minister Jorge Castaneda has just gone on-line at the Henry George School of Social Sciences website.  As some of you may know, I’m a Trustee of the School, and the session was the latest in its “Smart Talk” sessions with some of the world’s leading economic thinkers.

The interview was conducted in late November, but trust me when I say that clicking on this link will bring you to a great conversation about numerous issues still in the headlines – especially concerning the continuing immigration crisis along the U.S.-Mexico border.

Last Friday, I appeared on Joe Piscopo’s morning drive-time radio talk show on New York City’s AM 970 The Answer to preview the State of the Union and discuss the state of the economy.  Special bonus:  We also briefly reviewed the big New York Knicks trade of injured star Kristaps Porzingis that was announced the day before!  Here’s the link.  My segment begins just past the 35-minute mark.

Finally, on January 22, IndustryToday.com published an detailed analysis of mine on which American manufacturing industries fared the best and worst last year in terms of job and wage growth.  Click here to read.

And keep checking in with RealityChek for news of upcoming media appearances and other development.

(What’s Left of) Our Economy: Inside that Big New Manufacturing Jobs Revision

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inflation-adjusted wages, Jobs, manufacturing, non-farm payrolls, private sector, wages, {What's Left of) Our Economy

Last Friday’s U.S. jobs report (for January) contained a special bonus: On top of the usual monthly numbers, and the insights they yielded on the impact of Trump tariffs on domestic manufacturing (described in this post), the statistics incorporated an annual revision that goes back several years – and they change the picture of industry that’s been available to date.

The big takeaways: U.S.-based manufacturing’s job creation performance has been slightly weaker lately than initially reported. But its wage performance has been more mixed – better in absolute terms but worse compared with the private sector overall. (The focus in this post when discussing relative performance is mainly on the private sector, because its economic performance stems largely from market forces. For the overall non-farm employment figure – the definition of the American employment universe used by the Labor Department, which reports these data, includes government jobs. Their results are driven largely by politicians’ decisions.)

First, let’s examine those latest monthly jobs numbers. They show that manufacturing hiring kicked off the new year on a soft note. Only 13,000 net new jobs were added – the worst such figure since August’s 8,000. And revisions were negative – with December’s initially reported 32,000 growth in payrolls downgraded all the way to 20,000.

As a result, 2018 still stands as manufacturing’s best job-creation year since 1997 – when employment grew by 304,000 on net. But the annual increase of 284,000 now stands at 264,000. Also noteworthy: The 2018 jobs gain far exceeded 2017’s 190,000 (which itself was first reported as 209,000.)

The downward revisions also decreased the improvement manufacturing had shown as a share of total non-farm employment. According to the previous employment release, manufacturing’s share of this U.S. jobs total came in just short of 8.56 percent – the best such figure since July, 2016’s 8.56 percent.

Today’s report lowered that December number to 8.52 percent – and kept July, 2016 at 8.56 percent. January’s share is 8.52 percent as well. The revised data show that manufacturing payrolls during the Trump administration have still been rising faster than total non-farm payrolls, since the figure for the first full Trump month stayed at 8.49 percent. But the out-performance has been more modest than previously judged.

So has the total increase in the number of manufacturing jobs since this figure bottomed in early 2010 – shortly after the official mid-2009 beginning of the current economic recovery. Before the latest revisions, Labor Department data showed that, through December, domestic industry had regained 1.389 million (60.58 percent) of the 2.293 million net jobs it had lost during the recession and its aftermath. Now, this figure stands at 1.356 million (59.14 percent of the lost jobs), and in January, it rose slightly to 1.369 million (59.70 percent).

Worse, the revised results show that manufacturing has been just as much of an employment laggard during this recovery than previously thought. Pre-revision, the Labor Department reported that overall private sector employment fell by 8.785 million from the December, 2007 onset of the last recession through its own February, 2010 bottom. These figures also pegged private sector jobs gains as 20.608 million from that low point through last December.

The revised private sector figures are 8.794 million jobs lost during the recession and its immediate aftermath, and 20.533 million regained through December. The January results pushed the jobs rebound figure up to 20.829 million.

On the pay front, the revisions show that manufacturing wages during the current recovery have actually risen slightly faster than previously reported, but that the gap with overall private sector wages actually widened.

First, the new monthly numbers. Pre-inflation hourly pay in manufacturing sank by 0.44 percent sequentially in January – the worst such performance since May, 2012’s 0.62 percent monthly drop. This decline greatly overshadowed the upward revision in December’s current dollar manufacturing wage improvement from 0.26 percent to 0.33 percent.

The overall private sector didn’t enjoy a great wage month in January, either: Pre-inflation hourly pay increased sequentially by only 0.11 percent – its worst such performance since October, 2017’s 0.15 percent decline. In addition, December’s monthly gain was revised down from 0.40 percent to 0.36 percent. But these latest results still beat manufacturing’s.

The January drop-off depressed manufacturing’s year-on-year pre-inflation wage gains down to 1.38 percent – the weakest such advance since February, 2015’s 1.25 percent. But the upward December monthly revisions did push that month’s annual increase up from 1.98 percent to 2.02 percent.

By contrast, the revisions increased December’s yearly current dollar private sector wage gain from 3.15 percent to 3.34 percent – the best since April, 2009’s 3.42 percent. January’s annual increase was 3.18 percent – also much better than manufacturing’s.

The new revisions improve manufacturing’s wage performance throughout the recovery, but not by much. Previously, such hourly pay was reported to have risen only by 18.60 percent from the expansion’s June, 2009 onset through December. Now that increase is judged to have been 18.72 percent, but the January monthly drop dragged down the new cumulative figure to 18.20 percent.

But from mid-2009 through December, pre-inflation hourly wages for the overall private sector also rose faster than previously thought – by 24.35 percent rather than 24.21 percent. As a result, the gap between the two widened, with private sector wages having increased by 30.07 percent faster than manufacturing wages during this period, not the 29.68 percent originally reported.

And the January numbers broaden the gap still further – to 34.50 percent.

The January inflation-adjusted wage figures won’t be out till later this month, but they don’t favor manufacturing, either, especially over the longer run.

In real terms, December’s monthly manufacturing wage increase has been upgraded from 0.28 percent to 0.37 percent, but the November results are literally a mirror image. They’ve been revised down from a 0.37 percent improvement to 0.28 percent.

The overall private sector’s after-inflation December wage gains have been revised down, too – from 0.46 percent to 0.37 percent. It’s 0.19 percent November advance was left unchanged.

On an annual basis, the new revisions still leave manufacturing’s December real wage gains at zero. At least that represented an improvement over the previous annual decrease of 0.28 percent. The overall private sector’s performance was upgraded from 1.12 percent to 1.30 percent – its best such results since 2015’s 1.82 percent.

The story is scarcely better for manufacturing when extended to the entire recovery. As with current-dollar wages, constant-dollar wage growth during this period was revised up – from 0.75 percent to 0.84 percent. The real private sector wage increase was upgraded, too – from 5.43 percent to 5.63 percent. So the real wage performance gap widened actually decreased – from 7.24 to 1 to 6.70 to 1.

Nonetheless, manufacturing remains in a real wage recession.  After-inflation hourly pay is down 0.09 percent on net since February, 2017. 

 

(What’s Left of) Our Economy: It’s Still the Same Old (Dreary) Story for Real U.S. Manufacturing Wages

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inflation-adjusted wages, manufacturing, manufacturing wages, private sector wages, wages, {What's Left of) Our Economy

Could anything be more revealing about the recent situation with America’s manufacturing wages than this development? Adjusted for inflation, industry’s wages were flat on a year-on-year basis. And that was their best such performance since July, 2017, when they rose by 0.65 percent over July, 2016’s levels.

Not that the news reported last Friday by the Bureau of Labor Statistics (BLS) was all bad for manufacturing workers. In December, their real wages increased by 0.28 percent on month – a pretty good performance by recent standards. Yet even that improvement represented a slowdown over the November sequential advance of 0.37 percent. (Both these monthly numbers are still preliminary.)

Moreover, not even the welcome advances of these last two data months was enough to lift manufacturing out of a long real wage recession. Price-adjusted hourly pay for its employees is still down a cumulative 0.28 percent since March, 2016.

In addition, the December data still left manufacturing a serious real wage laggard when compared with the private sector economy as a whole. (BLS doesn’t include government workers’ wages in these reports, since their wages are set by politicians’ decisions, not market forces, and therefore say almost nothing about the fundamentals of the U.S. labor market.)

Month-on-month, inflation-adjusted private sector wages advanced by 0.46 percent – their biggest such increase since the 1.05 percent spurt of January, 2015, and a much bigger increase than in after-inflation manufacturing wages.

On an annual basis, constant dollar private sector wages in December were up 1.12 percent – the strongest such rise since September, 2016’s 1.13 percent and, again, a much larger improvement than for real manufacturing wages.

And adding insult to injury, the gap between inflation-adjusted wages in manufacturing and in the private sector overall keeps widening. From the beginning of the current economic recovery (June, 2009) to last month, after-inflation private sector wages were up 7.24 times more (5.43 percent) than price-adjusted manufacturing wages (0.75 percent). As of the previous December, the gap was 5.69-to-one, as real private sector wages had risen by 4.27 percent, and real manufacturing wages had improved by the same 0.75 percent.

Following Up: More on Those Great New U.S. Manufacturing Jobs Figures

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Following Up, inflation-adjusted wages, Jobs, Labor Department, manufacturing, real wages, Trump, wages

Friday’s post focused on what the new U.S. jobs report that morning (containing December data) revealed about the Trump tariffs’ impact so far on domestic American manufacturing. (Overwhelmingly, they’ve done no harm.) But it’s also worth noting other industry-related highlights of this Labor Department release – and highlights they were.

First, the headline figure (32,000 net new manufacturing jobs created on-month in December) was the best such performance since last December’s 39,000. And the total revisions for October and November together added 3,000 jobs to the results for those two months. (The November and December figures are still preliminary. Further, starting next month, the Labor Department will start publishing revisions of the key data back to January 2014 – which will further change yesterday’s findings.)

Partly as a result of the last few months’ numbers, 2018 stands preliminarily as the best year for U.S. manufacturing job creation (284,000) since 1997 (304,000). The previous December-to-December manufacturing employment gain was 209,000.

Also, manufacturing jobs as a share of total non-farm jobs (the Labor Department’s definition of the total U.S. employment universe) rose to just under 8.55 percent – their highest level since July, 2016 (8.56 percent). At the start of the Trump administration (February, 2017 was its first full month in office), this figure stood at 8.49 percent. In other words, manufacturing payroll growth has been faster than overall payroll growth under President Trump.

Even so, manufacturing’s prior relative employment creation has been so weak that the sector still remains a laggard on this front for the recovery era as a whole.

Since bottoming out in February and March of 2010, manufacturing has regained 1.389 million (60.58 percent) of the 2.293 million jobs it had lost during the Great Recession and its aftermath. Overall private sector employment sank by 8.785 million during the downturn, but since then has regained 20.608 million jobs.

Manufacturing keeps trailing the overall private sector on the pay front, too. In December, pre-inflation manufacturing wages rose by 0.26 percent – considerably slower than the overall private sector’s 0.40 percent.

Year-on-year, current-dollar manufacturing wages are up by 1.98 percent – their best such performance since September, 2017 (2.18 percent). Between the previous Decembers, manufacturing hourly pay before inflation has advanced by 1.75 percent. But overall current-dollar private sector wages improved by 3.15 percent year-on-year in December.

In fact, since the current recovery began, in mid-2009, pre-inflation manufacturing wages have improved by only 18.60 percent. Overall private sector wages are 24.12 percent higher.

Moreover, the gap has been widening. The above figures show that, as of the latest data, private sector wages had grown 29.68 percent faster than manufacturing wages. As of the previous December, the difference was 24.80 percent.

Manufacturing’s pay performance looks even worse after adjusting for inflation. The latest data are from November – when manufacturing’s sequential increase (0.37 percent) actually topped that of the private sector (0.19 percent). (December’s won’t be published until the middle of this month.) But the November figures also show that, whereas private sector wages inched up year-on-year by 0.84 percent, manufacturing paychecks actually dipped by 0.27 percent.

Indeed, real manufacturing wages are cumulatively down by that amount since February, 2016 – meaning that, technically, they remain mired in a long recession (two or more date quarters of net deterioration).

Moreover, during the current economic recovery, inflation-adjusted manufacturing wages have risen less than a tenth as fast (0.47 percent) as private sector wages (4.95 percent). And the gap has widened significantly over the past year, when it stood at a 0.75 percent real wage increase for manufacturing versus a 4.07 percent rise for the private sector overall.

Those Stubborn Facts: The Fading Henry Ford Wage Strategy

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automotive, autos, Henry Ford, manufacturing, Those Stubborn Facts, wages

Share of an average American factory worker’s annual earnings needed to buy the average new car, 1965: 25 percent

Share of an average American factory worker’s annual earnings needed to buy the average new car today: 59 percent

 

(Source: “Trump lashes GM plant closings as UAW prepares to defend jobs,” by Ted Evanoff, Memphis Commercial Appeal, November 28, 2018, https://www.commercialappeal.com/story/money/cars/2018/11/28/trump-lashes-gm-but-plant-closings-likely-even-uaw-prepares-defend-jobs/2137046002/)

Making News: New National Radio Podcast on Tariffs and China Trade Now On-Line…& More!

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Breitbart News Tonight, Breitbart.com, China, Federal Reserve, industrial production, IndustryToday.com, Jobs, John Carney, Making News, manufacturing, tariffs, Trade, tradewars, Trump, wages

Once again I got a sort-of-last-minute request last night from Breitbart News Tonight to appear on that radio show.  But thanks to the invention of the podcast, you can listen to the interview on-line.  So click here (the segment with my name on it is right near the top), for a great discussion about how President Trump’s tariffs are (and aren’t) impacting the American economy and its manufacturing sector, and about whether a truce in the U.S.-China trade war is in the offing.

In addition, it was great to be quoted yesterday on the trade implications of the latest Federal Reserve industrial production data by Breitbart‘s John Carney – the only other analyst I’ve seen who has consistently been reporting on the message being sent by official U.S economic data on the tariffs’ actual impact on the U.S. economy.

Finally, IndustryToday.com this last week re-published two recent RealityChek posts – on how supposedly tariff-vulnerable metals-using industries generally have been claiming even more job openings than the rest of the manufacturing sector; and on a possible big new reason why manufacturing wages have lagged so far beyond job creation.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

 

(What’s Left of) Our Economy: Manufacturing’s Real Wage Recession Keeps Lengthening

Tags

inflation-adjusted wages, manufacturing, private sector, real wages, recovery, wages, {What's Left of) Our Economy

Whether it’s because of unskilled, unproductive newbies or continuing jobs offshoring or (as likely) some combination of these and other trends, today’s real wages figures from the Bureau of Labor Statistics can’t be read as good news for American manufacturing workers. For it means that the lengthy technical real wage depression they’ve been suffering on average just got longer.

Because of a 0.37 percent monthly drop in October – the biggest such falloff since August, 2017 (0.64 percent) – inflation-adjusted hourly pay in manufacturing is now down on net since December, 2015 (by 0.19 percent). That’s one month longer than this slump had lasted as of the previous data in this series, and a decline that’s lasted far longer than the definition of a technical recession: a cumulative decline over at least two consecutive quarters.

Another measure of manufacturing’s pay doldrums: After-inflation hourly wages are now back to exactly their level in June, 2009 ($10.72), when the current recovery began. That is, they’ve made absolutely no progress over a more than nine-year period.

Moreover, the October figures indicate that current-dollar manufacturing wages will weaken further before they start strengthening. In particular, the 1.11 percent annual decrease was the biggest such deterioration on a relative basis since October, 2012’s 2.09 percent nosedive. By contrast, between October, 2016 and October, 2017, real manufacturing wages dipped by only 0.28 percent.

The real wage news for all private sector workers was better – but not by much. On month in October they were down 0.09 percent (their first such drop since February). On an annual basis, though, they rose by 0.65 percent. And meager as that is, it was the best yearly performance since January (0.66 percent), as well as a substantial improvement over the previous October’s 0.19 percent.

As a result, though, inflation-adjusted private sector wages still have advanced by only 4.75 percent since the current economic recovery began in mid-2009. And whether justified by inadequate skills levels or not, for an economy that remains strongly dependent on consumption for its growth, that doesn’t sound like a formula for lasting prosperity.

(What’s Left of) Our Economy: Manufacturing Jobs Update – & the Wage Mystery Solved?

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Breitbart.com, illegal immigrants, Jobs, John Carney, manufacturing, offshoring, Trade, training, wages, {What's Left of) Our Economy

All the commotion surrounding last week’s midterms elections – and their continuing aftermath in places like Florida – make it all too easy to overlook the details of the latest U.S. government report on the country’s employment situation. These most recent results are worth examining because the dominant trends of the last few months – encouraging job creation and discouraging wage numbers – have remain so persistent that it may be time to consider a new explanation that I, anyway, have been skeptical of for months.

First, the data.

Domestic manufacturers created 32,000 net new jobs in on month in October – the biggest sequential increase since last December (39,000). Indeed, employment gains have been so healthy lately year that manufacturing’s share of total non-farm employment (the U.S. government’s jobs universe) hit its highest level (8.537 percent) since August, 2016 (8.533 percent).

Year-on-year, as of October, manufacturing payrolls grew by 296,000 – a pace nearly double that achieved between the previous Octobers (152,000). Further, that yearly increase was the second best since February, 1998 (311,000). And the very best annual performance since February, 1998 came in July (300,000).

As a result, American industry has now regained 1.332 million of the 2.293 million jobs it lost from the late-2007 beginning of the last recession through its latest employment bottom (in February and March, 2010). That is, 58.09 percent of those lost jobs are back.

Not that manufacturing employment doesn’t have a long way to go, especially compared with the rest of the private sector. It’s still 6.99 percent below those recession onset levels – whereas overall private sector payrolls are 9.75 percent greater. And since its own last employment bottom (February, 2010), the private sector has regained 20.103 million of the 8.785 million it had lost during the worst of the downturn – an increase that’s nearly four times as great as manufacturing’s. But it’s tough to deny that industry’s hiring performance is on the way up.

But manufacturing’s wage picture keeps looking completely different. October pre-inflation wages growth…wasn’t. Hourly pay was the same as in September. The private sector’s October monthly wage gain wasn’t terrific either. In fact, at 0.18 percent, it was the lowest since February’s 0.11 percent. But it still left manufacturing in the dust.

The annual increases make manufacturing’s wage laggard status even more obvious. At 1.46 percent, it was below that between the previous Octobers (1.67 percent), and the worst such figure since July’s 1.31 percent.

By contrast, private sector current-dollar annual wage growth in October was 3.14 percent. That was not only considerably faster than the October, 2016-October, 2017 increase (2.28 percent). It was the best such performance since April, 2009 (3.37 percent), in the midst of the recession.

Further, the widening of the private sector-manufacturing pay gap continues. From the mid-2009 beginning of the current recovery (in economic growth, if not employment, terms) through last October, pre-inflation private sector wages had increased 21.71 percent faster than their manufacturing counterparts. As of this October, the difference was 30.05 percent.

In absolute terms, since the recovery began, private sector wages are up 23.31 percent, versus only 17.77 percent for manufacturing.

Actually, it’s not just sluggish manufacturing wage growth amid strong job creation during this economic expansion that’s puzzled economists. It’s been a mystery for the entire private sector. But one explanation for manufacturing’s poor performance is starting to win me over, at least in part, and a clue comes from that robust year-on-year rise in manufacturing pay during deeply recessionary April, 2009.

At that time, of course, manufacturers were shedding jobs like mad. So why was pay going up? According to many manufacturing executives I spoke with at the time explained, they were letting go of their least experienced (and worst paid) workers – therefore, wages per worker seemed to be rising even though those workers’ paychecks themselves weren’t actually growing. Better paid workers had simply become a greater share of manufacturing’s total.

As explained to me by John Carney, the economics and finance editor over at Breitbart.com, something like the inverse may be taking place now: manufacturing companies have had to reach so deeply into the potential labor pool to fill positions that they’ve needed to hire many employees with subpar levels of skills and education, and who therefore aren’t very productive. As a result, they’re not performing productively enough to justify rising pay.

I’m still not convinced that poor worker quality is the only answer for relatively poor and stagnating manufacturing pay. For one, the threat of job offshoring has by no means vanished, as demonstrated vividly by the Carrier export of jobs to Mexico that then President-elect Trump promised to deal with in 2016. And manufacturers still hire lots of illegal aliens, especially in sectors like meat packing and processing, which undoubtedly dampen wage growth as well. Nor is it clear to me that manufacturers have started spending enough time and money training new workers, as opposed to expecting someone or something else (mainly, the schools) to do the job for them.

But I’ve also heard directly – and consistently – from manufacturers how difficult it remains to find even minimally qualified applicants to fill positions, and I can’t reasonably dismiss all or even most of these claims. So the one conclusion I can confidently reach is that following the manufacturing jobs and wages figures has become more important than ever for serious students of the U.S. economy.