While Manufacturers had a more positive month than expected, adding 8,000 jobs in December, 2015 will go down one of the softest years for employment growth in the sector since the Great Recession. All in, manufacturers added 30,000 workers on net in 2015, well below the 215,000 workers hired in 2014.
Nondurable goods employment increased by 14,000 workers in December, but total hiring in the manufacturing sector was pulled lower by a reduction of 6,000 employees from durable goods firms. The strongest gains in December were seen in the food manufacturing (up 3,500), miscellaneous durable goods (up 3,500), plastics and rubber products (up 3,300), chemicals (up 2,500) and furniture and related products (up 2,100) sectors. In contrast, machinery (down 6,300), transportation equipment (down 3,300, including a loss of 2,400 for motor vehicles and parts), primary metals (down 2,800) and fabricated metal products (down 1,500) each experienced significant declines for the month.
At the same time, manufacturing earnings slipped a bit in December. Average weekly earnings for manufacturing employees declined from $1,037.85 in November to $1,034.89 in December. This has trended slightly higher in 2015, however, up from $1,017.18 in December 2014, or 1.7 percent.
In the larger economy, nonfarm payrolls rose by 292,000 workers in December. This was well above the consensus expectation of around 210,000, and similar to the manufacturing data discussed above, revisions for October and November added another 50,000 employees to the total. The U.S. economy created 2,650,000 nonfarm payroll jobs in 2015, which was somewhat lower than the 3,116,000 generated in 2014. Much of that growth came in the services sector, but construction employment was also better last year. The unemployment rate remained at 5.0 percent, with the participation rate up from 62.6 percent in November to 62.7 percent in December, its highest level since May.
While headwinds like lower commodity prices, a strong U.S. dollar and economic struggles abroad continue to challenge the sector, it is more important than ever that policymakers in Washington focus on pro-growth policies that will help manufacturers face these challenges head-on. A competitive tax code, true regulatory reform, and the ability to reach new markets will help strengthen our competitiveness in an already challenging global economy.
Latest posts by Chad Moutray (see all)
- Philly Fed: Manufacturing Activity Accelerated in February at Strongest Rate since November 1983 - February 16, 2017
- Housing Starts Ease a Bit in January but Remain Mostly Encouraging - February 16, 2017
- Consumer Prices Increased 2.5% Year-Over-Year in January, the Highest since March 2012 - February 15, 2017