Manufacturing employment edged up by 1,000 in June, stabilizing a little after declining by 2,000 in May. On the positive side, it was the sixth increase in net hiring in the past seven months, with the sector adding 71,000 workers over that time frame. That stands in sharp contrast to the loss of 16,000 workers for all of 2016, and overall, the data suggest an increased willingness among manufacturers to add new workers since November. Yet, job growth in May and June in the manufacturing sector has been underwhelming, especially when compared to sentiment surveys—such as the one from Institute for Supply Management released earlier in the week—that have indicated relatively healthy expansions in employment. With that in mind, I would continue to expect better job gains moving forward, particularly given the improved demand and production outlook and stronger economic growth globally.
In June, the underlying manufacturing data were mixed. Employment among durable goods firms rose by 9,000 for the month, but this was nearly offset by a decline of 8,000 jobs for nondurable goods businesses. It was the second straight month with declines in nondurable goods employment growth, led by weaknesses in food manufacturing (down 3,300), paper and paper products (down 2,800) and apparel (down 1,000) in this release. In addition, motor vehicles and parts (down 1,300) has also continued to struggle on softer-than-desired sales year to date. Perhaps notably, employment in the food sector rose in non-seasonally adjusted data, so perhaps its decline could reflect those seasonal adjustments. Indeed, over the past 12 months, food manufacturing notched the fastest job growth in the sector, adding 28,300 since June 2016. Read More