The U.S. economy added 157,000 nonfarm payroll jobs in January, according to the Bureau of Labor Statistics (BLS). This was in-line with the consensus estimate for the month. However, the unemployment rate edged higher from 7.8 percent in December to 7.9 percent in January. BLS included a number of revisions for 2012 to reflect payroll counts and seasonal adjustments. Including these revisions, nonfarm payrolls rose 2.2 million in 2012, or roughly 180,000 per month.

The report clearly illustrates the slow growth in the manufacturing sector since the beginning of 2012. Last month’s estimate of 25,000 workers added in December has now been revised down to just 8,000. In January, the sector added 4,000 net new workers. This reflects the weaknesses that we saw over the second half of the year and manufacturers have lost 7,000 workers since July overall.

In January durable goods industries added 3,000 additional employees on net and nondurables contributed 1,000 jobs. The largest gains were seen among motor vehicle and parts (up 2,500), petroleum and coal products (up 1,500), chemicals (up 1,400), computer and peripheral equipment (up 1,200), and fabricated metal products (up 1,000). These were counteracted by declines in nonmetallic minerals and products (down 1,900), electrical equipment and appliances (down 1,700), machinery (down 1,300), and miscellaneous nondurables (down 1,300), among others.

Average weekly earnings in the manufacturing sector dipped from $980.06 to $976.84 which is consistent with weaker activity. The average number of hours in the workweek also edged slightly lower, from 41.7 to 41.6, with the average overtime hours staying the same at 4.2 hours. (continue reading…)

Nonfarm payroll gains were larger than expected in October, according to the Bureau of Labor Statistics. They were by 171,000 workers instead of the 125,000 increase anticipated by most economists. It was also an improvement from the 148,000 nonfarm payrolls employees added in September, which was revised from its earlier 114,000 estimate.

At the same time, the unemployment rate rose from 7.8 percent to 7.9 percent. The higher figure – despite improvements in nonfarm payroll numbers – stems from a slight uptick in the participation rate from 63.6 to 63.8. Also, as noted in last month’s release, a large increase in part-time employment was a major factor in the decline in the unemployment rate from 8.1 to 7.8 percent in September. This appears to have modulated somewhat, with part-time workers who are doing so for economic reasons down from 8.6 million to 8.3 million.

Manufacturing employment also improved, with 13,000 net new workers in October. But it is hard to ignore the loss of 13,000 and 14,000 jobs in August and September. Note that the last two month’s data have been revised, as the previous estimates were for 38,000 workers lost in the manufacturing sector. Manufacturers have added 158,000 workers year-to-date or exactly 500,000 since the end of 2009.

Looking at specific sectors, nondurable goods industries fared better than durables, up 8,000 versus 5,000 workers added in the month. Sectors with the strongest gains include food manufacturing (up 2,700), chemicals (up 1,600), computer and electronic products (up 1,600), plastics and rubber products (up 1,600), beverages and tobacco products (up 1,500), nonmetallic mineral products (up 1,400), and transportation equipment (up 1,400). (continue reading…)

Automated Data Processing (ADP) reported that total nonfarm payrolls rose 162,000 in September, below the 189,000 workers added in August. This suggests modest growth in employment last month, and the figure was slightly above expectations, which were around 140,000. The bulk of the net new jobs came from the service sector, which added 144,000 employees on net.

Manufacturers hired just 4,000 more workers on net in September, making it the sixth consecutive month in a row of lackluster job growth for the sector. This corresponds with weaker global growth and rising anxieties about the future of the U.S. market. For the goods-producing sector as a whole (which would add construction, mining, and utilities), there was a net gain of 18,000 employees.

As with past reports, small and medium-sized establishments accounted for most of the net job gains, or 89.5 percent of them in September. In fact, large goods producers added just 1,000 workers for the month.

The ADP numbers are often looked at for clues regarding the official government employment statistics, which will be released on Friday morning. Last month, the Bureau of Labor Statistics reported disappointing jobs numbers, with 96,000 nonfarm payroll jobs added and manufacturers shedding 15,000 workers. While these figures were below the estimates provided by ADP, it did suggest inadequate job gains since the spring, which was similar. (continue reading…)

The Bureau of Labor Statistics reported that regional and state employment numbers did not change much in June. Given that this corresponds to this corresponded with disappointing national job creation numbers (e.g., up just 80,000), this should not be surprising.

The highest unemployment rates in the country continue to be in Nevada (11.6 percent), Rhode Island (10.9 percent), and California (10.7 percent). North Dakota’s 2.9 percent unemployment rate makes it the lowest, with Nebraska (3.8 percent) and South Dakota (4.3 percent) following closely behind.

States with the fastest growth in manufacturing employment in June include Ohio (up 4,700), Tennessee (up 2,900), Indiana (up 2,800), Washington (up 2,400), and Illinois (up 2,400). At the other end of the spectrum, the largest losses occurred in California (down 4,400), Texas (down 3,400), Florida (down 3,000), New York (down 3,000), and New Jersey (down 2,400).

Taking a longer view, Michigan still leads the pack with the most manufacturing job gains since the end of the 2007-2009 recession. Since December 2009, it has added 64,000 net new workers. It was followed by Ohio (up 49,200), Indiana (up 48,400), Texas (up 45,700), and Illinois (up 42,900).

Chad Moutray is chief economist, National Association of Manufacturers.

Today’s Labor Department jobs report showed employment rose 120,000 in March over February, considerably less than analysts had been expecting, and about half the average gain of the previous three months. 

Manufacturing employment, however, was a bright spot in the figures. Outperforming the economy as a whole, the March manufacturing jobs gain accounted for nearly one-third of the entire private sector increase. 

Manufacturing employment rose 37,000 in March, the second-strongest gain in the last 12 months, and continuing the manufacturing jobs gain that began in January 2010.  Since that time, manufacturing has gained 470,000 jobs – and has seen employment grow 10 percent faster than in the rest of the private sector.

Durable goods employment continued its strong growth pattern, gaining 26 thousand jobs in March.  Reflecting resurgent motor vehicle production in the United States, the March employment gain in that sector accounted for nearly half of the entire durable goods employment increase.  Non-durable goods employment rose 11,000.

The strong growth in manufacturing that has been going on since January 2010 is clearly visible in the attached graphs, as is the robust performance of the durable goods sector and the lackluster record in non-durables employment. (continue reading…)

The Bureau of Labor Statistics (BLS) observed a higher number of job openings in January in the manufacturing sector, according to new Job Openings and Labor Turnover (JOLTS) data. Manufacturers posted 285,000 new jobs in January, up from 252,000 in December. The bulk of this increase occurred in durable goods industries, with nondurable goods manufacturers’ also upping their job postings slightly.

This is obviously a positive sign of future hiring intentions, but it contrasts somewhat with actual hiring activity in January. Both net hiring and net separations figures dropped in the month. The number of manufacturing hires fell from 269,000 in December to 246,000 in January. December’s figure appears to indicate a rush of hiring before the end of the year, which was not sustained in January. Likewise, separations for the industry dropped from 239,000 to 213,000. These numbers suggest net hiring of 33,000 in January.

Looking at the larger economy, job openings, hirings and separations were all lower in January than December. Growth in manufacturing job openings was one of the bright spots. There were 3,459,000 job openings in January, compared to 3,540,000 in December. Still, the longer-term job openings trend is a positive one, as there were 2,860,000 job openings overall in January 2011. This can also be seen in the attached graphic for the manufacturing sector.

Likewise, the overall job market has improved at the state level, as well. BLS also released state and regional employment information for January showing mostly lower unemployment rates and higher levels of nonfarm employment. The lowest unemployment rate in the U.S. is still in North Dakota at 3.2 percent, with Nevada having the highest at 12.7 percent. The largest monthly improvements in the unemployment rate were found in Mississippi (now 9.9 percent) and Missouri (now 7.5 percent), with each down 0.5 percentage points since December.

Looking at the manufacturing sector, the largest monthly gain occurred in Michigan, up 16,300 workers in January. This reflects recent gains in the motor vehicle sales. On a year-over-year basis, Michigan has added 31,800 manufacturing jobs since January 2011, the most of any state. Other states with large increases in manufacturing employment in the past year include Texas (up 25,900), Ohio (up 17,700), Indiana (up 16,900), Washington (up 16,400), Iowa (up 11,800), South Carolina (up 11,200) and Illinois (up 10,500). These gains speak largely to growth in durable goods production in many of these regions.

Chad Moutray is chief economist, National Association of Manufacturers.

With consumers and businesses more confident, the U.S. economy continues to expand modestly. An improved – but still weaker-than-desired – jobs picture is part of that. The U.S. added 227,000 net new jobs in February, or 1.2 million in the past six months. Manufacturing has played a significant role in the recent rebound and since the end of the recession. In fact, over the past three months, manufacturers have added 111,000 new workers as overall activity has picked up. The manufacturing sector has contributed over 13 percent of all net new jobs created in the nonfarm economy since December 2010.

To be fair, the recent job gains in manufacturing have not been as broad-based as we might prefer. They have stemmed primarily from durable goods producing industries, with nondurables continuing to lag. This trend has been fairly consistent over the past two years, yet it would be nice to see greater employment gains across-the-board. Of course, this also mirrors industrial production data, with stronger growth tending to concentrate among the motor vehicle, aerospace, fabricated metals, machinery and primary metals sectors.

One of the larger threats to growth is a slower global economy. Mario Draghi, the European Central Bank president, announced a lower forecast for real GDP growth, with output slightly contracting for the continent as a whole this year. Meanwhile, other economies are also slowing. China, for instance, just cut its growth target to 7.5 percent. This slower growth shows up in the international trade figures released on Friday. Goods exports dropped in most regions of the world, including those to China and Europe. Increased imports of petroleum were another factor, with the overall trade deficit widening for the third consecutive month.

This week, we will gain further insights into the strength of the current rebound. New industrial production figures will be released on Friday, following regional survey data from New York and Philadelphia. The Federal Reserve Board will also announce on Tuesday whether or not it intends to pursue any new monetary policies. As always, the Fed will be mindful of inflation, and later in the week, the Bureau of Labor Statistics will issue updates on both consumer and producer prices. In addition to those releases, other highlights for the week include updates on consumer and small business sentiment, job market turnover and retail sales.  

Chad Moutray is chief economist, National Association of Manufacturers.

The U.S. economy added 227,000 net new jobs in February, according to the Bureau of Labor Statistics. This was a stronger-than-expected increase, but it was still below the revised gain of 284,000 in January. Manufacturers added 31,000 net new workers, bringing the sector’s three month increase to 111,000. Since December 2010, the manufacturing sector has generated 316,000 net new jobs. Over the same time period, there were 2.35 million nonfarm payroll jobs added in the past 14 months. Therefore, 13.4 percent of all of the nonfarm payroll jobs added in those 14 months were from manufacturing. 

Much has been made of the participation rate lately, as we have seen a drop in the number of people employed over the past few months. The participation rate rose from 63.7 percent in January to 63.9 percent in February. Still, the rate was 64.2 percent in February 2011. Meanwhile, the number of discouraged workers dropped 53,000 in the month. The “real” unemployment rate – which included discouraged and underemployed workers – is now 14.9 percent, down from 15.1 percent last month.

Looking specifically at the February job gains in manufacturing, all of the net job gains stemmed from the durable goods sector, which rose by 31,000. Nondurable sector employment was flat. The largest gains came from fabricated metal products (up 11,400), transportation equipment (up 8,300, including 5,600 from motor vehicles), machinery (up 4,500), furniture and related products (up 3,100) and beverages and tobacco products (up 2,300). Declining sectors included printing and related support activities (down 2,500), miscellaneous manufacturing (down 1,600) and paper products (down 1,300).

The average workweek for manufacturers rose slightly from 40.9 hours in January to 41.0 in February. The average amount of overtime remained at 3.4 hours. Likewise, the average weekly earnings for manufacturing workers rose from $977.51 to $979.90.

Overall, these numbers show continued strength in the U.S. economy, with manufacturing playing a key role in the recent rebound. While total nonfarm payroll and manufacturing employment grew somewhat below the gains of January, the job gains of the past three or four months have been impressive. Manufacturers continue to express cautiously optimistic about activity over the next few months – something which bodes well for employment growth in the sector.

With that said, it is also clear that manufacturers are closely following the developments in Europe and the tax and regulatory discussions in DC. The recent run-up in energy and raw material prices has also captured their attention. Therefore, as we have noted for a while, anxieties about possible threats to the economy continue to persist, even as the domestic outlook has become more positive.

Chad Moutray is chief economist, National Association of Manufacturers

 Two narratives dominated last week’s economic discussion. First, as the Beige Book from the Federal Reserve Board stated, the economy “continued to increase at a modest to moderate pace in January and early February.” In his congressional testimony, Chairman Ben Bernanke was also quick to cite the important role that manufacturing has played in the recent rebound, with higher levels of activity reported in most areas of the country. Indeed, regional surveys from the Dallas and Richmond Federal Reserve Banks observed greater production activity and increased optimism for the next six months.

This upbeat assessment is shared by business economists at the National Association for Business Economics, who see a stronger outlook. Their consensus estimates for real GDP growth for this year and next are 2.4 percent and 2.8 percent, respectively. Adding to this sentiment, the Bureau of Economic Analysis (BEA) revised its estimates for fourth quarter 2011 growth up from 2.8 percent to 3 percent, led by increased consumer spending and business inventory accumulation. BEA also reported modest growth in personal income and spending for January, with strong gains in durable goods purchasing. Consumers, too, are more confident, according to the Conference Board, with their sentiments about the current and future economy at their highest level since this time last year.

In contrast to the more positive tone of many of these studies, the second narrative of last week focused on a series of indicators that unexpectedly declined. Most of us were anticipating growth for the Institute for Supply Management’s purchasing managers index, but it declined from 54.1 in January to 52.4 in February. This was led by a slower pace of growth for new orders, with production and employment also easing. Likewise, the Census Bureau reported reduced durable goods orders and construction spending in January.

In each of these cases, the longer-term trend remains a positive one and is in line with the first narrative. November and December figures were sharply higher, and so it might be expected to have some easing afterwards. Growth should resume in the coming months, especially as industrial production should grow around 4 percent this year. Even with that said, it is also clear that manufacturers are closely watching the events of Europe, once-again resurgent energy and raw material prices, and policy actions stemming from Washington. They remain cautious that one of these headwinds might derail growth, even with higher optimism overall.

This week, everyone will be focused on Friday’s jobs numbers. With 82,000 net new jobs created in the past two months, I anticipate continued improvements in employment for the sector, but perhaps not as large as were seen in November and December. Other key indicators of note include the release of revised productivity data on Wednesday and international trade findings on Friday.

Chad Moutray is chief economist, National Association of Manufacturers.

The National Activity Index from the Chicago Federal Reserve Bank dropped from 0.54 in December to 0.22 in January. Positive numbers suggest that the U.S. economy is growing above its historical trend. Therefore, despite the decline, the real story is the fact that the index has shown above trend growth for two consecutive months. It was positive only three months (January, July and December) in 2011.

Industrial production was one reason that the index dropped, as it was unchanged in January. Of course, as was noted last week, manufacturing production was the exception, with a strong 0.7 percent gain for the month. Positive forces in the economy include employment, sales, orders and inventories. Housing and consumption remain drags on economic growth.

The three-month moving average for the index is 0.14, up from 0.06 last month. Values under -0.70 suggest that the economy might be in a recession. The fact that this measure continues to move away from the recession threshold is obviously a good sign, mirroring other indicators which show recent rebounds in economic activity. While risks still exist, they have lessened significantly over the past few months.

Chad Moutray is chief economist, National Association of Manufacturers.