Unemployment Rate Drops, but Slight Change for Manufacturing

By January 7, 2011Economy

From the Bureau of Labor Statistics, the Employment Situation Summary for December, 2010.

The unemployment rate fell by 0.4 percentage point to 9.4 percent in December, and nonfarm payroll employment increased by 103,000, the U.S. Bureau of Labor Statistics reported today. Employment rose in leisure and hospitality and in health care but was little changed in other major industries.

Dave Huether, chief economist of the National Association of Manufacturers, observes that the notable drop in the unemployment rate is the most positive news to come from the monthly BLS report.

“The fall in the unemployment rate is a good signal,” Huether said. “The improving jobs picture should boost consumer confidence early this year, and that in turn should give some momentum to the housing recovery. Housing and construction are big contributors to the economy, the manufacturing sector included, so this report overall sends a positive signal to manufacturers in the United States.”

Still, taken as a snapshot, the December figures for manufacturing are uninspiring.

Manufacturing employment changed little over the month (+10,000). Following job growth earlier in 2010, employment has been relatively flat,  on net, since May. Construction employment also was little changed overall in December (-16,000). Within construction, there were job losses in heavy  and civil engineering (-13,000) and in residential building (-6,000).

With just 10,000 additional jobs in manufacturing, a small sample, one should not read too much into the subcategories. Still, most of that gain of 10,000 manufacturing jobs came in durable goods: fabricated metal products, which added 4,100 jobs; transportation equipment, which includes motor vehicles and parts, up 5,500 jobs; and computers and electronic products, which rose 3,600 jobs.

The largest drop came in machinery, down 2,800 jobs.

On a year to year basis, the unemployment rate in manufacturing did improve throughout 2010. The unemployment rate for manufacturing in December 2010 was 10 percent, down from 11.9 percent a year earlier.

As for manufacturing in durable goods industries, the unemployment rate was 10.4 percent last month, compared to 13.3 percent in December 2009.

The NAM’s Huether will have more on the BLS employment report later today here at the blog.

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