The Bureau of Labor Statistics (BLS) said that manufacturing job postings and hires both fell further in September. The latest Job Openings and Labor Turnover Survey (JOLTS) data suggest that the number of job openings have fallen for four straight months. After peaking at 308,000 job openings in March, there were just 238,000 postings in September.
The significance of this is that job openings had been on an upward trend over much of the past two years, but that appears to have been reversed. Uncertainties in the marketplace – with a timely coincidence that this figure is being released on Election Day – are clearly impacting manufacturing activity, and therefore hiring.
Indeed, hiring is also lower, down from 270,000 in June to 230,000 in August to 226,000 in September. These losses appear to be in both durable and nondurable goods sectors. At the same time, separations – which include layoffs, quits, and retirements – have also fallen from 250,000 in August to 239,000 in September. This suggests that net hiring has turned negative for two months in a row, albeit less so than in August. Net separations were 20,000 in August and 13,000 in September.
A similar story could be told using data for the larger economy. Total job openings declined from 3,661,000 in August to 3,561,000 in September. The only major sectors with increased postings in September were retail trade and health care. Hiring and separation levels were also lower. With that said, net hiring (or hiring minus separations) increased from 85,000 in August to 161,000 in September. This presents something of a silver lining even as it is clear that the rate of hiring has eased.
There continues to be clear weaknesses in the manufacturing sector, with slower economic growth worldwide and anxieties in the U.S. surrounding the election and the fiscal cliff. While there have been some data points suggesting improvements in sales and production, larger headwinds are persistent, and manufacturers are not yet certain enough to warrant additional hiring. (The October jobs report did show a pickup of 8,000 manufacturing workers nationally, but it is still well below where it could be.)
Moving forward, leaders in the manufacturing sector will be looking for improvements in global sales and for resolution of the fiscal issues domestically so that we can reverse these trends. Manufacturing provided outsized output and employment contributions over much of the past couple years, and it will no-doubt do so again once the economy gets back onto firmer footing.
Chad Moutray is chief economist, National Association of Manufacturers.
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