Tag: Bureau of Labor Statistics

Manufacturing Job Openings Fell Again in June

The Bureau of Labor Statistics said that job openings in manufacturing fell from 237,000 in May to 215,000 in June, according to the Job Openings and Labor Turnover Survey (JOLTS). That was the fewest number of job postings in the sector in two years, and it represented a continuation of the decline in openings from the recent high of 310,000 in June 2012, one year ago. The percentage of job openings as a percentage of total employment in the sector, or the job openings rate, has decreased from 2.5 percent to 1.8 percent over the course of the past 12 months. This backs up other data showing a hesitance to bring on new workers right now.

As further evidence of this, net hiring has been negative for four straight months, with the number of hires lower than separations over that time. (The JOLTS data have a time lag, and we learned last week that manufacturers added 6,000 workers in July, with 9,100 of those coming from the automotive sector.)

In June, manufacturers hired 225,000 workers, down from 239,000 in May. This was still an improvement from March’s 201,000 hires, the recent low point. At the same time, manufacturing separations — including layoffs, quits, and retirements — declined from 249,000 to 229,000. This implies net hiring of -4,000 for the month, or slightly better than the -10,000 observed in May.

Meanwhile, the story was somewhat different in the larger economy. The number of job openings rose somewhat from 3,907,000 in May to 3,936,000 in June. Despite the higher number, the job openings rate remained the same at 2.8 percent, essentially where it has been for much of the past year. Sectors with more job openings in June included accommodation and food services, construction, professional and business services, and retail trade. Moreover, net hiring grew from 109,000 in May to 120,000 in June.

Overall, jobs growth remains modest at best in the macroeconomy, but for manufacturers, the reduction in job openings and hiring illustrate a hesitance to add new workers at the current time. It will be important moving forward to get manufacturers flourishing again, which should allow for improvements in hiring.

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Producer Price Increases Pickup in June, Building on May’s Gains

The Bureau of Labor Statistics reported that producer prices for finished goods rose 0.8 percent in June, building on the 0.5 percent gains of May. As such, we have seen a bit of a rebound in pricing pressures, particularly as energy costs have risen. Prices for finished energy goods were up 1.3 percent in May and 2.9 percent in June, but to be fair, these increases followed several months of declines. At the same time, food costs have also risen in the past two months, up 0.6 percent and 0.2 percent, respectively. The largest increases in June stemmed from higher meat prices.

On an annualized basis, producer prices for finished goods have grown 2.5 percent. This is the fastest pace in raw material pricing pressures since March 2012. Nonetheless, core inflation still remains in-check. When you exclude energy and food from the analysis, core producer prices increased 0.2 percent in June and 1.6 percent year-over-year. This is below the Federal Open Market Committee (FOMC) of the Federal Reserve Board’s stated target of 2 percent or less. As such, the FOMC should continue to feel free to pursue its “highly accommodative” policies. That will be true whether or not the Fed “tapers” its asset purchases later this year.

For manufacturers, producer prices were up just 0.1 percent in June or 1.4 percent over the past 12 months. This represents a pickup in pricing pressures from May, when the annualized pace was just 0.3 percent. Still, it would still be in the acceptable range for many manufacturers, at least for now. The fastest monthly growth was seen in the paper (up 0.7 percent), food (up 0.6 percent), textile products (up 0.5 percent), leather products (up 0.5 percent), and beverage and tobacco (up 0.4 percent) manufacturing sectors. In contrast, the largest decline was seen in the paper products manufacturing sector, down 0.8 percent in June but still up 6.7 percent for the year.

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Manufacturing Sheds Jobs in March

Manufacturing employment declined by 3,000 in March according to the Bureau of Labor Statistics, its first decrease since September. Manufacturing employment has been soft over much of the past year, with just a few exceptions. The sector has added 77,000 net new workers over the past 12 months.

Over that time frame, there were 1.9 million nonfarm payroll workers hired, implying that manufacturers created just 4 percent of all of the net new jobs since March 2012. That really illustrates how uncertainty and weak global demand have impacted a sector that had before last year been providing outsized growth for output and employment. Since the end of the recession, manufacturers have hired an additional 510,000 workers, or roughly 9 percent of all new jobs.

Looking specifically at the manufacturing employment numbers for March, the durable goods sectors added 4,000 additional workers, with nondurable goods industries shedding 7,000. The largest monthly gains were seen in the fabricated metal products (up 3,400), machinery (up 3,000), primary metals (up 2,000), and plastics and rubber products (up 1,200) sectors. In contrast, some of the sectors with declining employment for the month included apparel (down 2,500), food products (down 1,600), wood products (down 1,300), and textile product mills (down 1,000).

The data on hours worked and compensation in the manufacturing sector were largely unchanged in March. The average weekly earnings for the industry edged marginally lower from $987.74 to $986.14. On the positive side, weekly earnings remain higher than the $978.84 average observed in January. In terms of average weekly hours, they also were slightly off, down from 40.9 to 40.8. This was somewhat counteracted by an increase in the average overtime hours of 3.4 in March, up from 3.3 in February. (continue reading…)

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Manufacturing Employment Growth Remains Weak

The U.S. economy added 157,000 nonfarm payroll jobs in January, according to the Bureau of Labor Statistics (BLS). This was in-line with the consensus estimate for the month. However, the unemployment rate edged higher from 7.8 percent in December to 7.9 percent in January. BLS included a number of revisions for 2012 to reflect payroll counts and seasonal adjustments. Including these revisions, nonfarm payrolls rose 2.2 million in 2012, or roughly 180,000 per month.

The report clearly illustrates the slow growth in the manufacturing sector since the beginning of 2012. Last month’s estimate of 25,000 workers added in December has now been revised down to just 8,000. In January, the sector added 4,000 net new workers. This reflects the weaknesses that we saw over the second half of the year and manufacturers have lost 7,000 workers since July overall.

In January durable goods industries added 3,000 additional employees on net and nondurables contributed 1,000 jobs. The largest gains were seen among motor vehicle and parts (up 2,500), petroleum and coal products (up 1,500), chemicals (up 1,400), computer and peripheral equipment (up 1,200), and fabricated metal products (up 1,000). These were counteracted by declines in nonmetallic minerals and products (down 1,900), electrical equipment and appliances (down 1,700), machinery (down 1,300), and miscellaneous nondurables (down 1,300), among others.

Average weekly earnings in the manufacturing sector dipped from $980.06 to $976.84 which is consistent with weaker activity. The average number of hours in the workweek also edged slightly lower, from 41.7 to 41.6, with the average overtime hours staying the same at 4.2 hours. (continue reading…)

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Manufacturing Job Openings and Hiring Were Sluggish in November

The Bureau of Labor Statistics reported that manufacturing job postings edged lower in November, down from 281,000 in October to 276,000 in November. The good news is that the number of openings in the sector retained most of the rebound observed in October after weaknesses seen in August and September. Job postings among manufacturers remained at 2.3 percent of the size of the total workforce in the sector. In essence, job openings growth was essentially flat, even as it was down by 5,000.

The other big story with the Job Openings and Labor Turnover Survey (JOLTS) data as it pertains to manufacturing is the continued sluggishness for hiring. Net hiring for manufacturers turned negative again, erasing the gains seen in October. There were 231,000 manufacturing hires in November, down from 242,000 in October. At the same time, separations in the sector – which include layoffs, quits, and retirements – rose from 228,000 to 232,000. This suggests net hiring of -1,000 in November.

This data corresponds to other indicators in the November timeframe which found manufacturers skittish toward employment growth. In the post-election environment, business leaders became more anxious about slowing sales and the prospects of going over the fiscal cliff. Indeed, the most recent NAM/IndustryWeek Survey of Manufacturers – released in early December – found that net hiring plans were negative for the next 12 months. It is still too early to know if that dynamic has changed since then in light of the fiscal cliff deal, but manufacturers remain cautious by-and-large even today.

In the larger economy, there was not much different in the November data than from the month before. Overall job postings were only marginally higher, up from 3,665,000 to 3,676,000, or 2.7 percent of the nonfarm workforce for both. The number of hires rose from 4,316,000 to 4,319,000, with net hiring of 181,000. Sectors with increased hiring in the month of November included construction, professional and business services, and state and local governments.

Chad Moutray is the chief economist, National Association of Manufacturers.

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Unemployment Rate Drops, But Job Growth Remains Disappointing

The unemployment dropped unexpectedly from 8.1 percent in August to 7.8 percent in September, according to the Bureau of Labor Statistics (BLS). The unemployment rate stems from a survey of households, and there was a large jump in the number of employed individuals (up from 142.1 million in August to 143.0 million). With such a large increase, the unemployment rate fell. These numbers are often volatile. Time will tell if these numbers hold when the October numbers are released on November 2. We might expect for the unemployment rate to go back over 8 percent at that time.

Monthly employment changes come from a different survey of business establishments. Using this survey, significant revisions to the July and August data were behind the improvement. As you can see in the attached graphic, July’s nonfarm payrolls rose from 141,000 as they were originally reported to 181,000 according to the revision. August’s nonfarm payrolls were upgraded from 96,000 to 142,000. This suggests an increase of 86,000 workers more than originally stated. For manufacturers, the revisions show that the sector lost more jobs in July and August than we thought, with the industry adding 18,000 workers in July (instead of 23,000) and shedding 22,000 workers in August (instead of 15,000).

The larger narrative about the current state of the economy has not been altered by the lower unemployment rate. In fact, there were just 114,000 nonfarm payroll workers added in September, continuing a disappointing streak of job creation since the spring. Manufacturing lost 16,000 workers, bringing its two-month losses to 38,000 employees. With manufacturers being one of the primary drivers of growth since the end of the recession, it is hard to argue that today’s employment numbers point to strength in the current economic environment.

Looking specifically at sectors within the manufacturing industry, durable goods businesses were hit harder in September than nondurables, with both of them seeing declines (down 13,000 and 3,000, respectively). Sectors with the largest declines included computer and electronic products (down 5,500), primary metals (down 3,400), printing and related support activities (down 3,200), transportation (down 3,000, with 3,400 from motor vehicles), and miscellaneous manufacturing (down 1,500). On the other hand, there was growth in the following sectors: wood products (up 1,700), chemicals (up 1,600), and food manufacturing (up 600), along with a few others.

Despite the lower employment numbers overall, manufacturing workers did have a slight uptick in the average workweek, up from 40.5 hours to 40.6 hours (mainly from durable goods sectors). The average amount of overtime was the same at 3.2 hours. Likewise, the average weekly earnings for manufacturing workers rose from $971.60 to $976.02.

In conclusion, the employment numbers provide mixed news. While there were upward revisions to nonfarm payrolls in July and August and increased overall employment in September, the larger story is one of continued weakness. U.S. job growth has been dismal since February, and manufacturers’ employment has declined for two months in a row. With slowing global growth and uncertainties about the domestic fiscal situation paramount in many minds, the prospects for future growth in the economy are shaky at best.

Chad Moutray is chief economist, National Association of Manufacturers. 

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Consumer Prices Rise in August on Higher Energy Costs

The Bureau of Labor Statistics reported that consumer prices rose 0.6 percent in August. This follows flat inflation for three of the past four months, as lower energy costs helped to ease inflationary concerns. As we saw with yesterday’s announcement on producer prices, August’s increase in pricing pressures was led by rebounding energy costs, particularly for gasoline, fuel oil, and natural gas. Overall energy prices were 5.6 percent higher last month for the consumer, with gasoline up 9 percent.

Food was another driver of growth at the producer level. This has not yet translated to higher consumer costs, with some notable exceptions (e.g., pork, eggs, whole milk, fresh fruit, and processed vegetables). Total food costs increased 0.2 percent, with food purchased at restaurants up 0.3 percent.

Core inflation, which excludes food and energy costs, increased 0.1 percent, the same as last month. On an annual basis, overall and core inflation were 1.7 percent and 1.9 percent, respectively. This suggests that inflation remains modest, and more specifically, it is under the 2 percent target stated from the Federal Reserve. With current inflation “in control,” this frees the Fed to do what it did yesterday by undertaking another round of quantitative easing to help stimulate the economy.

Chad Moutray is chief economist, National Association of Manufacturers.

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Manufacturing Job Openings and Hiring Dropped in July

The Bureau of Labor Statistics said that the number of manufacturing job openings dropped from 296,000 in June to 271,000 in July. The figure for June was also revised lower, down from its original estimate of 312,000. This suggests that manufacturers have slowed their rate of posting new positions, even as the number of openings continues to exceed actual hiring.

Manufacturing hiring and separations were also lower. Hirings declined from 270,000 to 243,000; while, separations – which include layoffs, quits, and retirements – fell from 263,000 to 226,000. Despite lower figures for both, these data do suggest net hiring on the part of manufacturers of 17,000 in July, up from 7,000 in June. The job market among manufacturers has softened over the course of the year, as net hiring was 36,000 in January – the fastest rate of 2012 so far.

These trends were true of the larger economy, as well. Total job openings were down from 3,722,000 in June to 3,664,000 in July, with hiring and separations also lower. Hiring levels increased in the construction, education, government leisure and hospitality, and retail trade sectors. But, these were more than offset by declines in manufacturing and professional and business services.

Chad Moutray is chief economist, National Association of Manufacturers.

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Manufacturing Job Openings Rise in May, But Hiring is Unchanged

The Bureau of Labor Statistics has said that manufacturing job openings rose significantly, up from 259,000 in April to 310,000 in May. This is according to the latest Job Openings and Labor Turnover Survey (JOLTS) data. Essentially, job postings have returned to where they stood in March. The higher level suggests that manufacturers could increase their net hiring in coming months, which is a positive sign.

With that said, current hiring levels were essentially flat, down from 260,000 to 258,000 for the month. This is 2.2 percent of the total manufacturing workforce, a rate that has been the same since February. Meanwhile, manufacturing separations – which include layoffs, retirements, and quits – were up slightly from 239,000 to 241,000, or 2 percent of the manufacturing workforce. This suggests net hiring of 17,000 for May, which is down from 21,000 in April.

Numbers for the overall economy mirrored those of the manufacturing sector. The number of job openings rose from 3,477,000 to 3,642,000. (Of potential interest: some of this jump could be related to seasonal adjustments, as the non-seasonally adjusted data was slightly lower for the month.) Hiring and separations were also higher, but net hiring was lower in May than in April.

These numbers show a labor market that has weakened considerably in recent months, and yet, the higher job openings figure suggests some degree of cautious optimism looking forward. The key will be how many of these postings will translate into actual jobs. This will hinge on a growing economy and increased production levels, or stated differently, manufacturers will pick up hiring again once current uncertainties about economic growth are eased.

Chad Moutray is chief economist, National Association of Manufacturers.

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Job Openings in Manufacturing Decline in April

New Job Openings and Labor Turnover Survey (JOLTS) data from the Bureau of Labor Statistics show manufacturing job openings declining significantly in April, offsetting the large gain seen in March. Job openings, which rose from 271,000 to 308,000 between February and March, dropped to 246,000 in April. Last month’s increase had led to hopes that the sector was picking up the pace for possible future hiring, but recent weaknesses seem to have brought that back to reality.

On the positive side, net hiring for manufacturing remains positive. There were 255,000 net new hires in April, down slightly from 263,000 in March. Separations were also lower, decreasing from 234,000 to 232,000 for the month. This suggests net hiring of 23,000 in April, below the 29,000 net gain of March.

Numbers for the overall economy mirrored those of the manufacturing sector. The number of job openings declined from 3,741,000 to 3,416,000. This was the lowest level since November. Hiring and separations were also lower.

These numbers show a labor market which has weakened considerably in recent months. Some impacts could be due to seasonal adjustments in the data, but more than likely, economic uncertainties have played a larger role. Worries about Europe and slowness in global growth have had an impact on U.S. employment markets, with overall hiring and job postings declining as a result. Hopefully, this begins to turn around, with production and employment measures higher moving forward.

Chad Moutray is chief economist, National Association of Manufacturers.

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