The U.S. Unemployment Rate Fell to 5.5 Percent, the Lowest Since May 2008

By March 6, 2015General

The Bureau of Labor Statistics said that manufacturers added 8,000 net new workers in February. This was slower than the pace seen in the past four months (October to January), which averaged 27,000 per month. Yet, it was with consistent softer demand and production data, with weaknesses in export markets, strength in the U.S. dollar, the West Coast ports slowdown and reduced energy prices dampening activity as we begin the new year. On the positive side, manufacturers have now added to their workforce for 19 straight months, with 877,000 additional employees in the sector since March 2010, its lowest point after the recession.

Durable goods industries added 11,000 net new jobs in February, with nondurable goods employment down by 3,000. Areas with the strongest growth in February included chemicals (up 2,700), fabricated metals products (up 2,700), computer and electronic products (up 2,400), transportation equipment (up 2,200), machinery (up 1,700), furniture and related products (up 1,200) and food manufacturing (up 1,000). In contrast, there were several sectors with declining employment for the month, including petroleum and coal products (down 5,700), apparel (down 1,300), wood products (down 1,200), paper and paper products (down 700) and textile mills (down 300).

Manufacturing employees earned more in February. Average weekly earnings for workers in the manufacturing sector increased from $1,023.77 in January to $1,025.41 in February. On a year-over-year basis, average weekly earnings have increased 1.8 percent. At the same time, the average number of hours worked in the sector was unchanged at 41.0 hours, but the average number of overtime hours slipped a little from 3.5 hours to 3.4 hours.

Meanwhile, nonfarm payroll employment increased 295,000 in February, which exceeded the 240,000 consensus expectation. This, however, reflected a revision to January’s figure, down from the original estimate of 257,000 to 239,000. This was the 12th consecutive month with job growth of at least 200,000 nonfarm workers. In addition, the unemployment rate fell from 5.7 percent to 5.5 percent, its lowest level since May 2008. The participation rate slipped slightly from 62.9 percent to 62.8 percent.

Overall, these jobs numbers were mostly positive, with the labor market continuing to see progress in the right direction. For their part, manufacturers have hired just over 17,400 workers on average each month since the end of 2013, which has been encouraging. Still, the February employment data also show softness in the manufacturing sector as we begin 2015. There have been several headwinds that have negatively impacted demand and output, and this has led to an easing in hiring in February in the sector.These headwinds just further underscore the critical need for Washington to act on policies, like Trade Promotion Authority, Export-Import Bank reauthorization and comprehensive tax reform that will help manufacturers grow.

Still, manufacturers continue to be optimistic in their outlook moving forward, with healthy gains for this year as a whole.

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

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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