The Bureau of Labor Statistics said that manufacturers lost 1,000 workers in September, with the overall jobs numbers negatively impacts by damaging hurricanes in the month. In addition, the July and August data were also revised lower, subtracting 32,000 from prior manufacturing job growth estimates. Despite the disappointing figures in September, the reduced hiring is likely a temporary phenomenon, with employment expectations continuing to be very strong overall. Indeed, manufacturers have accelerated the pace of hiring since December, adding 122,000 workers on net over that 10-month time frame. That is a definite improvement following the loss of 16,000 workers seen in 2016 as a whole and a sign that firms have stepped up their hiring as a result of a stronger economic outlook and increased demand and production activity. Indeed, since the end of the Great Recession, manufacturing employment has risen by nearly one million workers, with 12.45 million employees in the sector in this report.
On this Manufacturing Day, it is important to remember that the ability to attract and retain a quality workforce is in a virtual tie for first place as one of the top challenges for manufacturers, according to the latest NAM Manufacturers’ Outlook Survey. As the labor market has tightened, workforce development challenges have become more pressing for business leaders in the sector. In addition, we have also seen some upward pressure on wages. In this release, average weekly earnings for manufacturing workers rose from $1,080.99 in August to $1,085.88 in September, with that figure up 2.0 percent over the past 12 months.
In September, durable goods employment rose by 4,000, but this was offset by a decline of 5,000 for nondurable goods businesses. The largest declines were in the printing and related services (down 3,600), motor vehicles and parts (down 3,200), chemicals (down 2,000), apparel (down 1,900), primary metals (down 1,800), textile product mills (down 1,500) and wood products (down 1,500), among others. Those declines were enough to counterbalance increased employment for food manufacturing (up 4,200), fabricated metal products (up 3,800), computers and electronic products (up 3,000) and machinery (up 1,700).
Meanwhile, nonfarm payrolls were also lower, down by 33,000 in September and the first decline in employment in the U.S. economy since September 2010. As noted above, the decrease in hiring should be transitory, and in general, we had seen strength in the overall labor market. From January through August, nonfarm payroll employment averaged 170,875 per month. That trend matters more than the hurricane-induced decline seen in this report. Along those lines, the unemployment rate feel from 4.4 percent to 4.2 percent, its lowest level since February 2001.