ADP: Manufacturing Employment Growth Remains Stalled

By October 2, 2013Economy

Automatic Data Processing (ADP) said that there were 166,000 net new nonfarm payroll workers in September, slightly higher than the 159,000 added in August. This was mostly in-line with consensus expectations. With official employment numbers from the Bureau of Labor Statistics unlikely to be released on Friday due to the government shutdown, it could be the only look at job creation that we will get this week. Overall, these data suggest only modest growth in employment, with an average of just 162,000 and 163,000 nonfarm workers added in the third quarter and year-to-date, respectively.

Manufacturing employment growth continues to be disappointing. Over the course of the first nine months of 2013, the sector has shed 12,000 workers; whereas, year-over-year growth was up by only 1,000. In the month of September, manufacturers hired an additional 1,000 workers on net, down from 4,000 in August.

Overall, the bulk of the net new jobs added in September came from service-providing sectors, up 147,000 for the month. Trade, transportation, and utilities (up 54,000) and professional and business services (up 27,000) accounted for much of this growth, with financial activities (down 4,000) losing employees. Meanwhile, goods-producing sectors hired an additional 19,000 workers on net, which was largely from construction (up 16,000).

Small and medium-sized businesses (e.g., those with less than 500 employees) contributed 61.6 percent of the net new jobs in September. This was down from nearly 79 percent in August, with the average for the past 12 months being 71.3 percent.

Overall, these numbers show that manufacturers continue to be hesitant to add new workers, with hiring in the larger economy also quite modest. Economic growth so far in 2013 has been less than desired, and while manufacturing leaders are cautious about sales and production in the coming months, there is also a tentativeness to such sentiment. Uncertainty about in the fiscal environment does not help. Instead, we urge policymakers to adopt pro-growth measures that will allow the sector to flourish and, on fiscal matters, to come up with long-term solutions that will solve our deficit and debt challenges.

Chad Moutray is the chief economist, National Association of Manufacturers.

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Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM), where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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