The Bureau of Labor Statistics (BLS) said that the number of manufacturing job openings dropped from 273,000 in July to 255,000 in August. This is its lowest level since December 2011, with job postings declining for three straight months.
The other big headline for the manufacturing sector is that net hiring has turned negative. For those who follow the more widely-cited employment report from BLS, this is not news, with fewer manufacturing workers in both the August and September jobs numbers. In August, manufacturers hired 233,000 workers, down from 244,000 in July. This hiring level is the lowest seen since June 2009. At the same time, separations – which include layoffs, quits, and retirements – rose from 228,000 to 248,000. This suggests net separations of 15,000 workers in August, a reversal of the net hiring of 16,000 observed in July.
The news was less severe for the larger economy. Total job openings declined from 3,593,000 in July to 3,561,000 in August. Both figures represent 2.6 percent of the total workforce, suggesting little change in the number of job postings (even with the slight decrease). Hiring picked up overall, with increases seen in the professional business services, education and healthcare, accommodation and food services, retail trade, and government sectors. These were somewhat offset by declines in construction, manufacturing, and arts, entertainment, and recreation. Net hiring remained positive, but declined for the month from 190,000 to 36,000.
In conclusion, the JOLTS data confirm that there are significant weaknesses in the manufacturing sector, with net hiring turning negative in August. Slower global growth and uncertainties about the future U.S. economy have hurt sales and hiring. While job postings continue to exceed the rate of hiring, both are moving in the wrong direction.
Chad Moutray is chief economist, National Association of Manufacturers.