The Bureau of Labor Statistics reported that manufacturers lost 3,000 workers in August, the first decline in 13 months. Moreover, the robust gains of 33,000 and 37,000 in June and July were both revised lower, down to 21,000 and 18,000. Even with these pullbacks, the data reflect continued strength in the labor market, with the sector adding 254,000 workers over the past 12 months, or an average of 21,167 per month. That is consistent with healthy growth in the manufacturing sector, including solid demand, production and the overall outlook.
Since the end of the Great Recession, manufacturing employment has risen by 1,264,000 workers, with 12,717,000 employees in the sector in this report. Turning to income growth, average weekly earnings for manufacturing rose from $1,107.82 in July to $1,110.28 in August, up 2.3 percent from $1,085.28 in August 2017.
Softness in manufacturing job growth during the July to August timeframe is not uncommon. Indeed, there were dips in employment during that period of time during the preceding three years, underscoring the importance of evaluating the health of the sector through analysis of the broader trend – which remains positive – than any one report. Nevertheless, the dip in employment and downward revisions should serve as an added incentive for the administration to resolve the myriad of trade disputes it is engaged in expeditiously.
Meanwhile, nonfarm payroll employment increased by 201,000 in August, up from 147,000 in July and somewhat better than the consensus estimate of 190,000. The unemployment rate was unchanged at 3.9 percent, but the so-called “real” unemployment rate, which includes discouraged and other “marginally attached” workers in the labor force, edged down from 7.5 percent to 7.4 percent, its lowest rate since April 2001. That is an encouraging sign of progress and one that is consistent with recent tightness in the labor market.
In August, nondurable goods manufacturers added 1,000 employees, but this was offset by a decline of 4,000 workers in the durable goods sector. The largest increases were in the chemicals (up 4,600), fabricated metal products (up 4,100), apparel (up 1,800), and electrical equipment and appliances (up 1,000) segments. In contrast, there was declining employment in several manufacturing sectors, including motor vehicles and parts (down 4,900), plastics and rubber products (down 3,600), computer and electronic products (down 1,800), furniture and related products (down 1,300) and machinery (up 1,200), among others.
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