U.S. employment numbers jumped significantly higher in January, according to the Bureau of Labor Statistics, with the unemployment rate dropping to 8.3 percent.  Moreover, nonfarm payrolls grew by 243,000, and manufacturers added 50,000 net new workers. These gains were greater than expected, and certainly, much higher than the estimates from ADP released two days ago. Consensus estimates had been for around 150,000 net new jobs with the unemployment rate remaining around 8.5 percent.

These numbers continue to affirm the rebound and importance of manufacturing to our economic recovery. There were 82,000 net new jobs created in the sector in the past two months. This is definitely a sign that manufacturers have picked up their activity of late. Moreover, manufacturers have added 287,000 of the 2,063,000 net new nonfarm payroll jobs generated in the last 13 months (since December 2010); this suggests that nearly 14 percent of all of the jobs generated in that time frame stemmed from manufacturing.

As I noted last month, though, we would be remiss without mentioning the fact that employment remains a significant challenge, even with today’s good news. The “real” unemployment rate – which includes discouraged and underemployed workers – is now 15.1 percent, down from 15.2 percent in December and 16.1 percent last year at this time.

There are currently 2.81 million Americans who are classified as “marginally attached to the labor force,” with 1.06 million being discouraged workers. This is up slightly from last month. (The civilian labor force also grew last month, from 240.58 million to 242.27 million.)

Looking specifically at the January 2012 figures, the bulk of the new jobs in manufacturing came from the durable goods sector, which was up 44,000 for the month. The largest gains came in fabricated metal products (up 10,900), machinery (up 10,500) and transportation equipment (up 10,300). Nondurable goods sector employment rose by 6,000 in January. In that sector, the strongest growth came in the chemicals (up 2,200), printing and related support services (up 1,700) and beverages and tobacco products (up 1,300) sectors.

The average workweek for manufacturers rose from 40.6 hours in December to 40.0 hours in January. The average amount of overtime edged slightly higher from 3.3 to 3.4 hours. Therefore, the average weekly earnings for manufacturing workers rose from $969.93 to $977.51.

Overall, these numbers show renewed strength in the domestic economy, with employment growth in almost every major industrial sector except information, financial services and government. It mirrors other recent economic indicators showing an uptick in activity since October. Moreover, several sentiment surveys suggest that manufacturers are optimistic about future production and employment in 2012, which should bode well for this year’s numbers.

Yet, it is important to remember that significant headwinds exist both in Europe and in the U.S. The labor and housing markets – while improving – still have a long way to go before they are healthy, and consumer and business optimism is mixed with persistent anxieties. Still, we will take good news when we can get it.

Chad Moutray is chief economist, National Association of Manufacturers.

Employers added 170,000 new nonfarm, private payrolls in January, according to Automated Data Processing (ADP). This builds on the solid growth of November and December but represents a fall-off from December’s 292,000 gain. As with last month’s report, most of the increase stemmed from additional service sector employment, which grew by 152,000. Manufacturers hired 10,000 net new workers in January.

Small and medium-sized payrolls (e.g., those with less than 500 employees) accounted for almost all of the net new jobs created in January, continuing a trend seen in past months, as well. In fact, 167,000 net new jobs stemmed from small and medium-sized entities, with larger establishments adding just 3,000. Among goods-producing firms, firms with larger payrolls reduced employment by a net 2,000 workers last month.

These numbers suggest that employment, while lower than the previous two months, continues to grow. The ADP figures were mostly in-line with estimates, with the Bureau of Labor Statistics reporting similar numbers on Friday.

Chad Moutray is chief economist, National Association of Manufacturers

The Bureau of Labor Statistics released the latest employment cost index data for the fourth quarter of 2011. Overall, wages and salaries in the private sector rose 0.4 percent in the quarter, matching their growth from the third quarter. Private sector benefit costs were up 0.7 percent in the quarter. On an annual basis, total compensation increased 2.2 percent from the fourth quarter of 2010, with benefits 3.6 percent higher.

Looking specifically at manufacturing, wages and salaries were up 1.8 percent in 2011, with total compensation rising 2.8 percent. The index breaks this data down by manufacturing occupations, and the annual increases in total compensation were as follows:

• Management, professional and related – up  3.1 percent in 2011
• Sales and office – up 2.6 percent
• Natural resources, construction and maintenance – up 3.0 percent
• Production, transportation and material moving – up 2.6 percent

The largest increase in compensation for manufacturers stemmed from benefits, which rose 4.7 percent year-over-year. It is important to note that much of this increase was due to higher health insurance premiums. A Kaiser Family Foundation survey released last year, for instance, estimated that family premiums for health insurance rose 9 percent in 2011 for family coverage, significantly higher than the 3 percent increase in 2010.

Chad Moutray is chief economist, National Association of Manufacturers.

The government reported that the U.S. economy grew by 2.8 percent in the fourth quarter of 2011, with manufacturers playing an integral role. Consumers and businesses replenishing their inventories were the largest contributors of real GDP for the quarter. In many ways, this number was not a surprise: other indicators also suggested an uptick in manufacturing activity in the months of November and December. Manufacturers are cautiously optimistic about future production, and the rebound is welcome news.

Yet, the GDP numbers also bring to mind challenges that might dampen growth in the coming months. It is unlikely, for instance, that we will see the same lift from inventories in the first quarter, and consumers have dipped into their savings to increase their purchases. At some point, this level of spending might ease so that consumers might pay off some of these debts. In addition, it is clear that the government sector will be a drag on growth for the foreseeable future – of which we were reminded when the Department of Defense announced budget cuts last week. Most pressing, though, is the constant reminder of Europe’s ills and the challenges that slowing global growth might have on our exports. Fitch Ratings downgraded several European nations’ credit ratings on Friday, following the lead of Standard & Poor’s from a few weeks ago.

These worries aside, most of the recent domestic economic indicators have been positive. Durable goods orders, for example, rose 3 percent in December, with strength in nondefense capital goods. This mirrors much-improved production, employment and investment data from the Kansas City and Richmond Federal Reserve Banks (and for that matter, in most of the recent regional) surveys. The National Association of Business Economics (NABE), in its latest Industry Survey, observes these improvements, with more economists upgrading their assessments for growth this year. Sixty-five percent of respondents to the NABE survey expect for real GDP to grow at least by 2 percent in 2012. Similarly, the Chicago Federal Reserve Bank’s National Activity Index indicates that the risk of a recession seems to be lessening.

These growth estimates are in line with those from the Federal Reserve Board, which estimates real GDP growing between 2.2 and 2.7 percent this year. The Fed also expects the unemployment rate to remain elevated, improving slowly to a range of 8.2 to 8.5 percent in 2012 and to 6.7 to 7.6 percent by 2014. The Federal Open Market Committee, even as it cites improvements in the domestic economy, remains worried about high unemployment, a still-weak housing market and uncertainties related to European sovereign debt. It stated last week that it now plans to keep interest rates at “exceptionally low” levels through late 2014 – an extension from its earlier intentions of doing so through mid-2013. With these moves, the Fed hopes that lower long-term rates spur more borrowing, both by homeowners and businesses.

This week, we will receive more data about production and employment, which will hopefully show continued growth in manufacturing in January. The Institute for Supply Management’s well-cited index of manufacturing activity will come out on Wednesday, and it is expected to be somewhat higher. On Thursday, new productivity data will be released, with manufacturing output per worker expected to continue to show strong growth. Finally, the Bureau of Labor Statistics will unveil new employment data on Friday, which should show increased hiring among manufacturers in conjunction with recently increased production.

Chad Moutray is chief economist, National Association of Manufacturers.

Reflecting general weaknesses in the economy in June, the level of job hirings and separations declined somewhat from May, according to new data from the Bureau of Labor Statistics. While the rates of each to total employment did not change much, there were 78,000 fewer hires and 129,000 less separations in June than in May.

This reduction in employment activity was broad-based in almost every major sector except for leisure and hospitality, which experienced additional hiring and separations in the accommodation and food services sector.

For manufacturing, hiring fell from 263,000 new workers in May to 246,000 in June. At the same time, total separations for manufacturers dropped from 272,000 in May to 250,000 in June. These declines occurred in both durable and nondurable goods sectors, with greater reductions in the latter.

The bottom line is that separations in manufacturing have exceeded hiring for the second month in a row. This time that difference is 5,000 workers, which is a marginal improvement from the 9,000 worker gap in May.

Meanwhile, job openings in manufacturing remained flat, with 211,000 new job postings in both May and June. This represents 1.8 percent of the total workforce in the sector for both months. Breaking this down using seasonally unadjusted data, however, the results are more mixed. There was an increase in job openings within durable goods industries (up from 151,000 in May to 164,000 in June); whereas, there were fewer postings for nondurables (down from 70,000 to 56,000).

These data confirm the weaknesses in the larger macro economy in June, which we already knew from employment and other data released in the past month. From the bigger picture, the Job Openings and Labor Turnover Survey (JOLTS) data continue to show the stagnant pace of growth for new job creation. While the pace of separations have slowed considerably (even with the more recent weaknesses), hires have remained more-or-less in the same range for much of the past couple years. This is a challenge for policymakers, as they seek strategies that promote economic growth moving forward.

Chad Moutray is chief economist, National Association of Manufacturers.

The Bureau of Labor Statistics reported that overall nonfarm payrolls increased by 117,000 in July, which was better than expected, and the unemployment rate dropped to 9.1 percent. Private sector jobs were up 154,000, with manufacturers hiring an additional 24,000 workers.

In addition, data for May and June were revised, and the manufacturing sector added 7,000 and 11,000 jobs, respectively, in those two months.  Since December 2009, manufacturers have created 289,000 new jobs, or over 15 percent of the total change in nonfarm employment over that time frame.

Within manufacturing, durable goods accounted for 23,000 of the net new employment, led by a healthy increase in workers at motor vehicle assembly plants (up 12,000). This is a sign that the automotive sector is beginning to recover from the supply disruptions of the spring. Fabricated metal products (up 4,500), furniture and related products (up 2,800), computer and electronic products (up 2,500), plastics and rubber products (up 2,100) and food manufacturers (up 1,700) also saw gains.

The average workweek for manufacturers was unchanged between June and July at 40.3 weekly hours and 3.1 overtime hours. Meanwhile, average hourly earnings ticked higher for manufacturing workers, up from $23.68 per hour in June to $23.79 in July.  The unemployment rate for manufacturers is currently 9.2 percent, unchanged from the previous month, with 9.6 percent within the durable goods sectors and 8.5 percent for nondurables.

In short, these numbers are an improvement. After a couple weaker months of job growth, manufacturing employment is once again moving in the right direction, led by the durable goods sector. It is important to note the bounce-back in employment within the automotive sector, which has been challenged since the Japanese earthquake and tsunami with supply chain issues. Hopefully, this bodes well for future growth in that sector.

However, manufacturers are still facing significant headwinds in the economy, as we saw yesterday with falling equity prices worldwide. To the extent that global economic problems – particularly in Europe – spread, this could have a major impact on confidence and growth in the coming months, limiting employment growth. Regulatory uncertainty is continuing to impact growth for manufacturers.

In addition, while a U.S. debt deal was enacted this week, much of the focus this fall will be on deficit reduction. As these numbers show, the public sector will continue to be a drag on both economic and job growth moving forward, but to the extent that we can get our fiscal house in order, the positives might outweigh the negatives.

Chad Moutray is chief economist, National Association of Manufactures.

Bureau of Labor Statistics data for March employment showed further growth in manufacturing employment, but at a lesser rate than for the first two months of the year. March manufacturing employment grew by 17,000, to 11.667 million. This compares to a 53,000 in January and 32,000 in February. March thus marked the second month of declining employment gains, though the March increase was significantly better than the November-December 2010 gains (see chart below).

The entire increase in March manufacturing employment was in the durable goods sector. Of the 17,000 jobs added in durable goods, the major gainers were fabricated metal products (up 8200 employees), machinery (up 4,900), and transportation equipment (up 6,100). The largest durable goods category in which employment fell was electrical equipment and appliances (down 1,900). Total durable goods employment in March was 7.227 million.

Non-durable goods employment showed no change, holding steady at 4.44 million employees. Employment in food manufacturing dropped by 2,800 employees, while the paper, printing, and petroleum products sectors each gained 800 workers.

The March employment figures are consistent with the manufacturing shipments data and industrial production data for the year so far, which show a continued gradual recovery from the 2008-09 manufacturing recession. Compared to March 2010, manufacturing jobs are up by 196,000, comprised of a durable goods gain of 217,000 and a nondurable goods employment drop of 21,000.

From the Bureau of Labor Statistics, The Employment Situation for March:

Nonfarm payroll employment increased by 216,000 in March, and the unemployment rate was little changed at 8.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, leisure and hospitality, and mining. Employment in manufacturing continued to trend up….

Total nonfarm payroll employment increased by 216,000 in March. Job gains occurred in several service-providing industries and in mining, and manufacturing employment continued to trend up. Since a recent low in February 2010, total payroll employment has grown by 1.5 million. (See table B-1.)…

Manufacturing employment continued to trend up in March (+17,000). Job gains were concentrated in two durable goods industries–fabricated metal products (+8,000) and machinery (+5,000). Employment in durable goods manufacturing has risen by 243,000 since its most recent low in December 2009.

According to table B-1, the largest gain in manufacturing sectors came in fabricated metals, up 8,200 jobs and motor vehicle and parts, up 6,100 jobs.

Manufacturing employment in electrical equipment and appliances fell 1,900 jobs.

From the Bureau of Labor Statistics, the Employment Situation Summary for December, 2010.

The unemployment rate fell by 0.4 percentage point to 9.4 percent in December, and nonfarm payroll employment increased by 103,000, the U.S. Bureau of Labor Statistics reported today. Employment rose in leisure and hospitality and in health care but was little changed in other major industries.

Dave Huether, chief economist of the National Association of Manufacturers, observes that the notable drop in the unemployment rate is the most positive news to come from the monthly BLS report.

“The fall in the unemployment rate is a good signal,” Huether said. “The improving jobs picture should boost consumer confidence early this year, and that in turn should give some momentum to the housing recovery. Housing and construction are big contributors to the economy, the manufacturing sector included, so this report overall sends a positive signal to manufacturers in the United States.”

Still, taken as a snapshot, the December figures for manufacturing are uninspiring.

Manufacturing employment changed little over the month (+10,000). Following job growth earlier in 2010, employment has been relatively flat,  on net, since May. Construction employment also was little changed overall in December (-16,000). Within construction, there were job losses in heavy  and civil engineering (-13,000) and in residential building (-6,000).

With just 10,000 additional jobs in manufacturing, a small sample, one should not read too much into the subcategories. Still, most of that gain of 10,000 manufacturing jobs came in durable goods: fabricated metal products, which added 4,100 jobs; transportation equipment, which includes motor vehicles and parts, up 5,500 jobs; and computers and electronic products, which rose 3,600 jobs.

The largest drop came in machinery, down 2,800 jobs.

On a year to year basis, the unemployment rate in manufacturing did improve throughout 2010. The unemployment rate for manufacturing in December 2010 was 10 percent, down from 11.9 percent a year earlier.

As for manufacturing in durable goods industries, the unemployment rate was 10.4 percent last month, compared to 13.3 percent in December 2009.

The NAM’s Huether will have more on the BLS employment report later today here at the blog.

The Burea of Labor Statistics has just released the employment situation report for August, 2010, with the unemployment rate “about unchanged” at 9.6 percent, up from 9.5 percent. Kind of folksy, that “about unchanged.”

Top line:

• Nonfarm payroll employment changed little (-54,000) in August, and the unemployment rate was about unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today. Government employment fell, as 114,000 temporary workers hired for the decennial census completed their work. Private-sector payroll employment continued to trend up modestly (+67,000).

Manufacturing:

• Manufacturing employment declined by 27,000 over the month. A decline in motor vehicles and parts (-22,000) offset a gain of similar magnitude in July as the industry departed somewhat from its usual layoff and recall pattern for annual
  retooling.

Associated Press summarizes: “WASHINGTON — The unemployment rate rose in August for the first time in four months as weak hiring by private employers wasn’t enough to keep pace with a large increase in the number of people looking for work.”