The Bureau of Labor Statistics reported that manufacturers added 16,000 net new workers in July, extending the gain of 12,000 workers June. (June was estimated originally to be a gain of just 1,000 workers, and the May data were also revised from a decline of 2,000 to 0.) The July increase in manufacturing was the fastest since February, and the sector has now increased employment in seven of the past eight months. Over that eight-month span (since November), manufacturers have averaged 12,500 new jobs per month—definite improvement from the loss of 16,000 workers on net in 2016. In July, there were 12,425,000 manufacturing workers. At the same time, average weekly earnings for manufacturing workers rose from $1,086.30 in June to $1,092.03 in July, up 2.8 percent over the past 12 months from $1,062.02.
In another sign that manufacturing jobs are on the rise, Toyota announced today that it will build a $1.6 billion U.S. assembly plant to develop electronic vehicle technologies. The plant opening in 2021 will produce up to 300,000 vehicles per year and employ 4,000 manufacturing workers.BLS data also shows durable and nondurable goods firms added 13,000 and 3,000 workers, respectively, for the month. Fabricated metal products (up 5,000), transportation equipment (up 3,800, including 1,600 from motor vehicles and parts), machinery (up 2,100), electrical equipment and appliances (up 1,400) and computer and electronic products (up 1,300) had the largest increases in employment in July, among others. In contrast, employment fell for furniture and related products (down 1,600), food manufacturing (down 1,000), apparel (down 600) and textile mills (down 300).
Meanwhile, the U.S. economy increased nonfarm payroll employment by 209,000 in July, easing from an increase of 231,000 seen in June but exceeding 200,000 for the third time in the past four months. The unemployment rate fell from 4.4 percent in June to 4.3 percent in July, returning to the pace seen in May, which was a 10-year low. Such strong labor market growth should further cement the Federal Reserve’s normalization plans, including raising short-term rates and reducing the size of its balance sheet, perhaps doing both at its upcoming meeting in September.
On the fiscal policy front, manufacturers expect action on tax reform to create even more jobs and boost their businesses. In the Second Quarter Economic Outlook Survey, 70 percent of manufacturers reported that comprehensive business tax reform would encourage their company to increase capital investment. In addition, two-thirds said tax reform would enable them to expand their business and 58 percent said they would hire more workers if tax reform were enacted.
That’s why manufacturers were pleased to see the joint principles for tax reform issued by the White House and House and Senate leaders in July. Manufacturers called the principles a “real step forward” and vowed to fight with everything they have to help the President and Congress make it happen.
The principles present a real chance to build a solid economic foundation in the United States that will generate more jobs, more investment and more growth—greater wealth that can be shared by all, manufacturers said.