Today’s employment report clearly shows that the economic recovery continues to sputter in manufacturing. Clearly, the possibility of tax increases hitting both consumer and small businesses is creating increased uncertainty in the economic outlook. As a result, businesses are becoming more hesitant to hire.
For manufacturers, after adding 170,000 jobs through the first seven months of the year, employment fell for a fourth consecutive month in November – further signaling the pace of the manufacturing recovery has slowed since the first half of the year. The decline in manufacturing employment in November was not driven by any one industry, but rather due to the fact that 13 of the 21 major industries posted moderate employment declines while only eight posted moderate increases. This marks the second consecutive month that a majority of manufacturing industries decreased employment, a troublesome sign that the positive momentum of the recovery is waning. After adding 170,000 jobs during the first seven months of the year, manufacturing employment has fallen 56,000 since July.
Another concerning sign in today’s report is that after improving in the third quarter, the share of those unemployed who have been out of work for at least six months remained unchanged last month at an alarmingly-high rate of 41.8 percent. The fact that the long-term unemployed continue to have a difficult time finding jobs is no surprise given the weak employment growth which is being caused, in part, by uncertainty of the strength of the recovery. Washington policy makers should take today’s news as a warning that the recovery remains very tepid, and in uncertain times, increasing taxes on consumers and businesses is a toxic combination that will further weaken the state of the U.S. economy and manufacturing.