The Bureau of Labor Statistics said that manufacturers added 36,000 net new workers in August, its fastest monthly gain in five years and increasing for the third consecutive month. In addition, the June and July data were revised higher, increasing employment in the sector by a total of 19,000 more than originally estimated. As such, manufacturing was a bright spot in the latest jobs data—a sign that the sector has rebounded from global headwinds over the past two years.
Indeed, over the past nine months, manufacturing employment has risen by 155,000, averaging 17,222 per month. That is a definite improvement following the loss of 16,000 workers on net for 2016. Moreover, total manufacturing employment rose to 12.48 million, rising by 1.03 million since the Great Recession and its highest level since January 2009.
Durable and nondurable goods firms added 28,000 and 8,000 workers, respectively, for the month. The largest boost in employment came from the motor vehicles and parts segment, up 13,700, with growth also seen for food manufacturing (up 6,600), fabricated metal products (up 5,200), computer and electronic products (up 3,900) and plastics and rubber products (up 2,600), among others. In contrast, employment fell for apparel (down 2,200), miscellaneous nondurable goods (down 1,100) and chemicals (down 400).
Despite the positive jobs numbers for the sector, average weekly earnings for manufacturing workers dropped from $1,091.21 in July to $1,079.77 in August, and average weekly hours edged down from 40.9 to 40.7 hours. With that said, average weekly earnings in the sector have risen by 2 percent over the past 12 months.
Meanwhile, the U.S. economy increased nonfarm payroll employment by 156,000 in August, which was lower than the consensus estimate of around 180,000. Unlike the manufacturing data described above, the nonfarm payroll data were revised lower in June and July, subtracting a total of 41,000 from those two months’ original estimates. The unemployment rate inched up from 4.3 percent in July to 4.4 percent in August. Despite the softer job growth in August, nonfarm payrolls have risen by an average of 175,625 per month year-to-date, which is a decent pace, and in general, we continue to see general strength in the labor market.
Of course, manufacturers would also like to see that employment growth continue, and business leaders continue to be optimistic that comprehensive business tax reform will get enacted, making them more competitive globally. We know that pro-growth tax reform will produce positive benefits for the overall economy—something that is long overdue.
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