The Bureau of Labor Statistics (BLS) reported that producer prices fell 0.1 percent in December, with lower food and energy prices driving the decline. Both food and energy costs for finished goods dropped 0.8 percent, reflecting the continued easing of both in recent months. When food and energy costs are excluded, the core PPI rate rose 0.3 percent. Year-over-year growth rates currently stand at 4.8 percent for all finished goods and 3.0 percent for core goods.

For manufacturers, producer prices declined 0.4 percent for the month, with costs up 6.0 percent since December 2010. The yearly change, though, represents an improvement from earlier in the year. In December, the sectors experiencing the largest monthly declines were petroleum and coal products (down 2.7 percent), primary metals (down 0.9 percent), textile mills (down 0.8 percent), leather and allied products (down 0.5 percent) and food manufacturing (down 0.4 percent).

The cost of intermediate and crude goods also fell, by 0.5 percent and 1.1 percent respectively. This, too, was led by declines in food and energy prices. 

Overall, this report suggests that inflationary pressures remain modest , with recent easing helping to ease the concerns that many manufacturers have had – particularly in the first half of 2011 – about pricing pressures. Nonetheless, many expect raw material and energy costs to rise in 2012, as seen in yesterday’s Empire State Manufacturing Survey and in other similar analysis. Indeed, the core PPI inflation rate edged higher each month in 2011, from 1.6 percent in January to 3.0 percent in December – a sign that higher costs are moving beyond food and energy, albeit not at an alarming pace.

Tomorrow, the BLS will report data on consumer prices.

Chad Moutray is Chief Economist, National Association of Manufacturers.

The employment picture continued to brighten with the release of December’s numbers by the Bureau of Labor Statistics earlier this morning. The unemployment rate fell from a revised 8.7 percent in November to 8.5 percent in December. In addition, nonfarm payrolls increased by 200,000.

This exceeded expectations which had predicted a rise of around 150,000. Manufacturing employment jumped by 23,000 net new workers in December, nearly mirroring the increase found in yesterday’s ADP report.

In 2011, the U.S. economy added 1.64 million new jobs, surpassing the 940,000 net new workers created in 2010. For manufacturers there were 109,000 and 225,000 new employees generated for the sector in 2010 and 2011. The manufacturing sector has added 334,000 new jobs since December 2009.

Employment remains highly elevated, with 8.5 percent unemployment still a major challenge to growth. The so-called “real” unemployment rate – which includes discouraged and underemployed workers –is now 15.2 percent. However, this is an improvement from the 16.6 percent rate observed in December 2010. 

Looking specifically at the December 2011 figures, the net increases in manufacturing employment stemmed entirely from the durable goods sector, as there was no change in nondurables for the month. Manufacturing sectors with the strongest monthly gains were transportation equipment (up 8,600), fabricated metal products (up 6,000) and machinery (up 5,300). The largest declines were found in petroleum and coal products (down 2,300), furniture and related products (down 1,400) and plastics and rubber products (down 1,400).

The average workweek edged slightly higher for manufacturers, from 40.4 hours in November to 40.5 hours in December. The average amount of overtime remained the same at 3.2 hours per week. Therefore, the average weekly earnings for manufacturing workers rose from $961.52 to $969.17.

This employment report is definitely good news and an extremely pleasant way to bring in 2012. The domestic economy – particularly among manufacturers – is starting to rebound after several weak months in mid-2011. More importantly, recent data suggest that manufacturers are upbeat about production and employment moving forward – a positive sign for the coming months.

Yet, we should also appreciate that significant weaknesses persist in the marketplace. The unemployment rate is still stubbornly high, the housing market is improving but still depressed, economic anxieties about Europe still resonate as well as the uncertainty being created in Washington. These concerns suggest that businesses remain cautiously optimistic about 2012, mindful of the headwinds that still persist around them.

Chad Moutray is chief economist, National Association of Manufacturers.

National Association of Manufacturers Chief Economist Chad Moutray discusses the July Employment Report in this video:

The Bureau of Labor Statistics reported this morning that the U.S. unemployment rate rose from 8.8 in March to 9.0 percent in April.  Despite this, there were 244,000 additional non-farm payroll jobs, with gains widespread across a number of industries, including manufacturing.

Manufacturing employment increased 29,000 for the month, with 19,000 in durable goods industries and 10,000 in nondurables.  The largest manufacturing employment gainers for April were food manufacturing (up 7,200), machinery (up 5,200), fabricated metal products (up 5,100), and computer and electronic products (up 4,000). Average hourly earnings in manufacturing also edged higher in April, from $23.56 to $23.60.  Similarly, the index of average number of hours worked among manufacturers moved from 84.9 to 85.1.  Overall, average weekly earnings in manufacturing are up 2.3 percent since last April.

This report is positive news for manufacturing, showing the recovery continues to move in the right direction with employment with 250,000 net new jobs created since December 2009. However, we are not seeing as large of employment gains as we would hope to at this point in the recovery, mainly due to uncertainty still facing businesses such as higher energy prices and increased regulation. Manufacturers use one third of our nation’s energy supply and as prices continue to increase it will only have a larger drag on the manufacturing sector and the economy.

Update: This version corrects an earlier error regarding the average number of hours worked.

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

This morning the Department of Labor’s Bureau of Labor Statistics released new figures for union membership rates in 2010. Their figures show that union membership continued its downward trend as the number of union members dropped to 14.7 million, down from 15.3 million in 2009. The overall “rate” of unionization also declined as only 11.9 percent of all workers were members of a labor union in 2010.

Last year’s figures showed that for the first time more union members were employed by government in the public sector than by private sector employers. This dynamic continued in 2010 as 52 percent of all union members were public sector employees.

So what does this mean?

• It’s clear that fewer and fewer American workers feel the need to join labor unions. These figures help to explain why labor leaders have been so adamant in their efforts to change U.S. labor law in order to give union organizers greater influence. In previous years these efforts were marked by union support for legislation like “card check” but union leaders and their allies in Washington are now more focused on using executive branch actions like regulations and NLRB cases to change the rules.
• In recent years, we’ve seen Big Labor turn increasingly leftward, promoting a “progressive” political and social agenda that has little do with jobs creation and economic growth. By and large, that’s a result of the public sector unions and their leadership trained in government and politics, not on the factory floor. The continuing rise in public sector unions means that fewer union leaders will be engaged with the private sector (manufacturing) economy, which ultimately pays for all the government union jobs. Union leaders have been seeking numerous opportunities to expand the size of government – which would ultimately lead to more public sector employees, which in turn would boost union members.

Policymakers should focus their efforts on developing policies that enable employers to create jobs, rather than seeking ways to prop up union membership by changing U.S. labor laws.

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.”

Today’s Labor Department employment report that job growth accelerated in April –- adding 290,000 jobs, the fastest monthly gain in four years -– is a welcome sign that the labor market is finally starting to build some positive momentum. The fact that 10 of the 12 major private sectors of the economy expanded employment in April, up from nine in March and six in February, indicates that employers are becoming confident enough in the emerging recovery to start hiring workers. Additionally, today’s report included positive revisions that increased employment gains by 121,000 in February and March.

Up for a fourth consecutive month, manufacturing employment increased by 44,000 to 11.6 million in April, bringing the 2010 gains to 101,000, the biggest four-month gain in a dozen years. The manufacturing employment gain was diffuse, with 19 of the 21 major industries adding jobs. However, half of the increase was in just three industries: food products, machinery and fabricated metals. The latter two were also responsible for the bulk of the 19,000 jobs added in March. Going forward, continued gains in manufacturing will not likely take hold until robust upswings in housing and business equipment join the strong export recovery that is already under way (and is likely one of the main drivers of the positive swing in manufacturing employment).

While the April rise in employment was impressive, the fact that the unemployment rate increased to 9.9 percent will likely weigh on consumer confidence in the near term. Unfortunately, this dichotomy of a simultaneous increase in both employment and the unemployment rate will likely continue in the months ahead. Those who were previously out of the workforce and re-entered as unemployed rose by 195,000 in April and accounted for a quarter of the unemployed last month. Over the past year, more than two million workers have left the workforce. As these workers resume searching for employment, they initially will be counted as unemployed and will elevate the unemployment rate until they find a job. Thus, a temporary rise in the unemployment rate back above 10 percent is a real possibility in the near term.

From a blog post from Gino DiCaro of the California Manuafcturers and Technology Association, “Create California jobs through efficient, effective regulations and renewed commitment to economic development“:

We must understand the impact new rules and regulations will have on job creation. Recent trends, resulting in unacceptable job and wage loss for California workers are alarming and unsustainable. Site Selection magazine has released new research showing, over the last three years, California averaged only 3.7 new or expanded industrial facilities per 1 million people, while the national average was 28.7. These results coupled with the fourth worst unemployment rate in the nation and an eroding manufacturing base requires a new perspective on California’s regulatory and economic development priorities.

It’s not about one regulation, it’s not about one industry or sector, it’s about overall process improvement and a renewed commitment to jobs in California.

The April 13 post released an open letter to the Legislature with more than 300 companies supporting a campaign to expand the Legislature’s oversight of California’s government agencies.

From the Bureau of Labor Statistics, unemployment rates in February for the bottom 10 metropolitan areas in the United States. Anything jump out?

363 Hanford-Corcoran, CA Metropolitan Statistical Area 18.2
364 Stockton, CA Metropolitan Statistical Area 18.4
365 Fresno, CA Metropolitan Statistical Area 18.5
366 Rockford, IL Metropolitan Statistical Area 18.6
367 Visalia-Porterville, CA Metropolitan Statistical Area 18.7
368 Modesto, CA Metropolitan Statistical Area 19.1
369 Yuma, AZ Metropolitan Statistical Area 19.9
370 Yuba City, CA Metropolitan Statistical Area 21.6
371 Merced, CA Metropolitan Statistical Area 22.1
372 El Centro, CA Metropolitan Statistical Area 27.2

From the Bureau of Labor Statistics, “Employment Situation Summary” for February 2010.

Nonfarm payroll employment was little changed (-36,000) in February, and the unemployment rate held at 9.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and information, while tem- porary help services added jobs. Severe winter weather

in parts of the country may have affected payroll employment and hours; however, it is not possible to quantify precisely the net impact of the winter storms on these measures.

And …

Employment in manufacturing was essentially unchanged in February. Small job gains in a number of component industries were offset by job losses in motor vehicles and parts and in chemicals.

Judging from all the news stories about weather-affected employment, thought the situation would have much worse. Good job of managing expectations, expectation managers!

Washington Post reports: “Job losses were surprisingly mild in February, the Labor Department said, as the employers cut 36,000 net jobs. Economists had expected worse losses due to the snowstorms last month. The unemployment rate was unchanged at 9.7 percent. The numbers suggest that while the job market is still weak, it is not worsening significantly.”

The photo above is K Street, Washington, looking west toward Farragut Square, 2:30 p.m., Wednesday, Feb. 10.