The Bureau of Labor Statistics (BLS) reported that overall nonfarm payrolls increased by 80,000 in October, which was slightly below expectations. Yet, the overall employment rate edged down from 9.1 percent in September to 9.0 percent in October, and manufactures hired an additional 5,000 workers on net for the month. Some of the previous months’ data was revised upward as well.
For manufacturing, there have been 303,000 net new jobs added since December 2009. Given that there were 2.2 million new nonfarm jobs added during that time, manufacturing has accounted for roughly 13.8 percent of the new growth in the past 22 months. This is slower than the 16 percent attributed to manufacturing a few months ago, but manufacturing growth has slowed somewhat since July.
Looking at specific sectors within manufacturing, durables experienced net hiring of 11,000, with nondurables shedding 6,000 workers for the month. The sectors with the fastest employment growth in October were transportation equipment (up 9,500, with 6,200 stemming from motor vehicles and parts), machinery (up 3,900), primary metals (up 2,300) and petroleum and coal products (up 1,300). The largest declines came in chemicals (down 2,800), miscellaneous manufacturing (down 2,400), printing and related support activities (down 1,900), plastics and rubber products (down 1,600) and communications equipment (down 1,500).
The average workweek edged slightly higher, from 40.3 hours in September to 40.5 hours in October, with the average amount of overtime remaining constant at 3.2 hours. In addition, the average weekly earnings for manufacturing rose from $958.74 to $967.95.
Despite the lower unemployment rate, these numbers continue to show an economy that is growing insufficiently to generate enough jobs. However, the net 5,000 increase in manufacturing employment was a nice improvement from the past two months, which experienced modest declines.
For what it is worth, some of the other numbers released this week give us reasons for cautious optimism in the months ahead. For instance, the Institute for Supply Management reported on Tuesday that new orders have stopped contracting and started expanding again, and yesterday, the BLS reported healthy increases in manufacturing output and productivity.
In fact, manufacturing output for durable goods rose 8.3 percent, with durable goods productivity up 9.9 percent. It is hard to imagine those growth rates continuing without employment following at some point. Indeed, surveys of manufacturers indicate that they do intend – by and large – to increase employment over the course of the next year.
So, let’s hope that these positive trends continue, even if it seems at times like we have to search long and hard for good news to cite.
Chad Moutray is chief economist, National Association of Manufacturers.