The U.S. economy added just 115,000 net new jobs in April, a fall-off from employment gains seen at the beginning of the year. Nonetheless, today’s employment release from the Bureau of Labor Statistics was mostly in-line or slightly below expectations.
Manufacturers added 16,000 net new workers, which was well below the revised increase of 41,000 seen in March. For the past five months, manufacturing has added 167,000 net new jobs. This is roughly 16 percent of all of the net new nonfarm payrolls added during this time frame. Taking a longer view, manufacturers have created 481,000 additional jobs on net since the beginning of 2010, or over 13 percent of the 3.7 million nonfarm payrolls added in the last 28 months.
Despite the lower payroll gains, the unemployment rate fell from 8.2 percent in March to 8.1 percent in April. This is obviously a movement in the right direction, as the unemployment rate was 9 percent as recently as October. With that said, the labor force participation rate has continued to edge lower, down from 63.8 percent in March to 63.6 percent in April. As such, there are now fewer people in the labor force, which helps the overall unemployment rate calculation. The so-called “real” unemployment rate now stands at 14.5 percent, which was unchanged for the month.
Looking specifically at the March job gains in manufacturing, durable goods sectors added 15,000 net new jobs, with nondurables contributing an additional 1,000. The largest gains came from fabricated metal products (up 5,700), machinery (up 4,900), furniture and related products (up 2,500), transportation equipment (up 2,300) and food manufacturing (up 1,700). Declining sectors included wood products (down 1,300), communications equipment (down 1,100) and paper and related products (down 1,000).
The average workweek for manufacturers rose slightly from 40.7 hours in March to 40.8 in April. The average amount of overtime rose from 3.3 hours to 3.4 hours. Likewise, the average weekly earnings for manufacturing workers rose from $973.54 to $977.57.
Overall, these numbers reflect recent sluggishness in the economy. Manufacturing activity, while still expanding and positive for the rest of this year, has experienced a slowing in recent months. Part of this might be due to seasonal adjustments, with some businesses taking advantage of the warmer winter.
Yet, it is also a reflection of other anxieties that continue to permeate our thinking. Higher energy and raw material costs dampened sentiment for both businesses and consumers, and worries continue to persist about U.S. fiscal policy moving forward and about Europe’s continuing struggles. This should not stop the expansion from continuing, and manufacturers should continue hiring in the coming months. Yesterday’s productivity figures help to back this up. Nonetheless, it is one more reminder of the tenuousness of this recovery, which plods forward modestly but tends to react with each new crop of anxieties.
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