Manufacturers Added 27,000 Net New Workers in November, the Most since March 2012

By December 6, 2013Economy

Manufacturers added 27,000 net new workers in November, according to the Bureau of Labor Statistics. This was the largest monthly gain since March 2012, and it was mostly consistent with the recent pickup in new orders and production for the sector since the beginning of the third quarter. This is definitely an encouraging sign, particularly given the hesitance of many business leaders of late to add new workers given uncertainties in the market. Illustrating this point, the average monthly job gain over the past four months (August to November) was 16,500; in contrast, over the prior five months (March to July) the average was a net decline of 8,000 each month.

The other significant thing to note is that manufacturing employment has pierced the 12 million mark for the first time since April 2009, with 12,014,000 workers now employed by the sector. Since the end of 2009, manufacturers have added 543,000 new workers. Over the course of the past 12 months, the manufacturing sector has hired an additional 76,000 workers, or 3.3 percent of the 2.3 million nonfarm payroll employees added over that time frame. While this suggests continued softness in hiring, it was up from the 1.7 percent and 2.4 percent paces observed in September and October, respectively – a sign of progress.

In November, both durable and nondurable goods firms added workers on net, up 17,000 and 10,000, respectively, from October. The largest monthly gains were in the following sectors: food manufacturing (up 7,800), motor vehicles and parts (up 6,700), fabricated metal products (up 3,100), chemicals (up 2,200), nonmetallic mineral products (up 2,000), primary metals (up 1,700), and petroleum and coal products (up 1,600). There were also some sectors with declining activity, including miscellaneous nondurable goods (down 3,000), apparel (down 200), and textile mills (down 100).

Consistent with the pickup in hiring for the month, the average number of hours worked also edged up. Durable goods employees worked an average of 41.5 hours a week with 3.5 hours of overtime, up from 41.3 hours and 3.4 hours, respectively. Likewise, average weekly hours in the nondurable goods sector in November was 40.2 hours and 3.4 hours, with the overtime up 0.1 hours from October. Average weekly earnings rose from $1,003.69 in October to $1,009.01, continuing an upward trend.

Meanwhile, the overall economy added 203,000 nonfarm payroll workers in November. Mirroring the analysis above, the pace of nonfarm payroll growth has accelerated of late as the economy has begun to improve somewhat. The average monthly gain in nonfarm payrolls over the past four months was 204,000, up from the 155,600 average over the prior five months. Likewise, the unemployment rate has fallen to 7.0 percent to November, down from 7.3 percent in October. This was the lowest unemployment rate since November 2008.

Overall, these employment numbers were mostly positive and a sign that the U.S. economy has begun to make some progress after softness in the spring and summer months. This was particularly true for manufacturing, which has seen disappointing job growth since the middle of last year. Despite these gains, though, it is important to note that hiring gains are expected to be mostly modest for the sector moving forward, and this will continue to be true until manufacturers sense that the economy is on a firmer footing and/or demand warrants sufficient additional hiring.

With that in mind, policymakers should work to reduce uncertainties in the marketplace – particularly in upcoming budget negotiations – and they should work to adopt pro-growth measures that will keep the employment gains noted here continuing strongly in the coming months.

Chad Moutray is the Chief Economist at the National Association of Manufacturers.


Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, 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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