The Bureau of Labor Statistics reported a rebound in manufacturing job postings and hires in October, recovering from the weaker data in August and September. The latest Job Openings and Labor Turnover Survey (JOLTS) numbers suggest that employment activity rose between September and October – something that we saw in the overall jobs numbers for October, as well. However the November jobs numbers turned negative again, with 7,000 fewer manufacturing workers. This was attributed to the impacts from the fiscal cliff and Hurricane Sandy.
Digging deeper into the October data, the number of job openings in the manufacturing sector rose from 241,000 in September to 279,000 in October. While still lower than the 297,000 observed in May, it represents a healthy increase from the month before, bringing it just above the average for the year so far (274,200). It could also indicate increased hiring in future months assuming that these postings translate into actual hires at some point.
Net hiring also improved in October, returning to a positive number. There was a net increase of 18,000 manufacturing workers for the month, which was better than the unchanged result in September and loss of 20,000 employees in August. Manufacturers hired 252,000 workers in October, up from 235,000 in September. Meanwhile, separations in the sector were down marginally from 235,000 to 234,000 for the month.
In the larger economy, the story was essentially the same. Total job openings rose from 3,547,000 in September to 3,675,000 in October. These increases were seen in every major industry except for education and health care. The pace of hiring and separations also rose, with net hiring of 255,000 in October.
These data provide some positive news, but give us room to be cautious as well. The fact that hiring and job postings improved in October was a good sign, with a rebound on the sharp drops of August and September. At the same time, it is important to note that the JOLTS data are released with a time lag. We know that manufacturing hiring stalled once again in November and is expected to remain weak in December and perhaps beyond.
In addition, it is also clear that net hiring has yet to move beyond the narrow band that it has operated in for much of the past three years, and it would take much larger improvements to be able to bring the unemployment rate down in any material way.
Chad Moutray is chief economist, National Association of Manufacturers.