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.

Automatic Data Processing (ADP) reported that total employment in July rose by 114,000, but manufacturing employment fell by 1,000. Given many of the weaknesses seen in recent surveys of manufacturers, the decline in employment should not be a surprise. It also mirrors many of these other indicators, with the employment rebound of June being offset in July.

The bulk of job creation in the month of July stemmed from small and medium-sized businesses, with 58,000 jobs being added by establishments with less than 50 employees and another 47,000 from those with 50 to 499 employees. The goods-producing sector lost 7,000 workers.

These numbers indicate modest growth in employment for the overall economy, but not enough to make a substantial dent in the unemployment rate. For manufacturers, it reflects many of the challenges that these firms have faced since March.

Looking ahead, it will be important for job growth to pick up for the manufacturing sector, particularly if the economy is to improve in the second half. Recent Federal Reserve Bank and other regional surveys have indicated an expectation of higher employment for the next six months, but those growth expectations have diminished somewhat from earlier in the year.

All of this leads us to the official numbers from the Bureau of Labor Statistics, which will be released on Friday. I would expect a similar result in terms of employment growth, both for total non-farm workers and for those in the manufacturing sector, as was seen in the ADP numbers released today.

Chad Moutray is chief economist, National Association of Manufacturers.

The Bureau of Labor Statistics reported earlier today hat the number of manufacturing separations exceeded hirings in May, with 259,000 hires and 268,000 separations, for the first time since last October. The difference between these two figures has narrowed since January, and May numbers correspond to weaknesses in the manufacturing sector. These include supply chain disruptions stemming from the Japanese disaster, rising energy and raw materials prices, and falling consumer confidence.

For the economy as a whole, the hiring and separations rate are roughly equivalent at 3.1 percent of the nonfarm workforce. There were 4,070,000 hires to 4,059,000 separations nationally. While the hiring rate was essentially unchanged, the number of separations rose by 266,000. Higher layoff and quit rates contributed to the increase in separations for the month. This is especially true in the West and Northeast; meanwhile, hiring continues to outpace separations in the South and Midwest.

The number of job openings rose from 2,953,000 in April to 2,974,000 in May, with the rate remaining at 3.0 percent of the workforce in each month. Manufacturers, however, posted 3,000 fewer job openings in May (to 223,000 from 226,000).

Overall, these numbers confirm much of what we already knew about the “cooling” of the manufacturing sector in the months of March, April, and May. Some of the separations among manufacturers were temporary due to extenuating circumstances, and yet, the more recent numbers from June which were released last week have shown this weakness in job creation continuing.

Moving forward, I would expect the number of separations to stabilize and fall once the economy improves. With that said, hiring has been stalled for some time, and it should be a top priority for policymakers to get the job engine churning again.

Chad Moutray is chief economist, National Association of Manufacturers.

This morning, the Bureau of Labor Statistics reported that nonfarm payroll employment rose by just 54,000 in May, its slowest pace in 8 months.  The April nonfarm payroll numbers were also revised down slightly, with a gain of 232,000 (instead of 244,000) new jobs. The unemployment rate in May rose from 9.0 to 9.1 percent. Manufacturing employment dipped by 5,000, and with the accompanying revisions, we can now say that manufacturers have increased employment only by 243,000 since December 2009.

Today’s report clearly indicates that rising raw material and energy prices are taking a toll on the economy, particularly when you look at the sectors which are hardest hit. While overall manufacturing output continues to grow, there are definitely reasons for caution ahead.

Digging deeper into the manufacturing numbers, employment changes in durable goods industries gained 8,000 jobs on net, while nondurables lost 13,000. 

Employment gains in sectors such as fabricated metal products (+6,500), machinery (+5,500), primary metals (+3,100), and furniture and related products (+2,200) were offset by losses in sectors such as transportation equipment (-8,800), food manufacturing (-7,000), printing and related support activities (-4,300), and paper and paper products (-2,500).

Average weekly hours in manufacturing remained relatively stable, going from 40.8 hours in April to 40.9 hours in May, with 3.2 hours of overtime on average in each month. Meanwhile, average weekly earnings also edged higher for manufacturing workers, up from $953.04 in April to $961.41 in May.

Other sectors in the economy were mixed.  Some areas of strength include professional and business services (+44,000), health care (+17,000), transportation and warehousing (+8,000), and mining (+7,000).  There was continued weakness in the following sectors, however: local government (-28,000), retail trade (-8,500), and leisure and hospitality (-6,000).  Most of the other major sectors remained largely unchanged.

An important point to note is that the durable goods sector, with the exception of transportation, did relatively well, which we hope is a good sign moving forward.  However, the uncertainty of the policies coming from Washington continues to weigh heavily on manufacturers.   

Chad Moutray is chief economist, National Association of Manufacturers.

Manufacturers added 25,000 jobs in April, according to a report issued by ADP.  The Labor Department’s employment numbers will be released on Friday, and the ADP numbers are closely examined to gauge where the official figures will be. 

Overall, the economy added 179,000 net new jobs in April, which was below the consensus estimate of 200,000 that many economists had predicted.  The goods-producing sector as a whole added 41,000 new jobs, with 26,000 of those stemming from medium-sized firms with between 50 and 499 employees.  Small goods-producing payrolls with less than 50 employees generated 14,000 new jobs.

For manufacturing, this was the seventh consecutive month of positive gains in employment, mirroring other economic indicators.  But, it also represented a slight fall-off from March, which experienced a net gain of 35,000 new jobs. 

Overall, this report lends further support for continued growth in the manufacturing sector, albeit with some relative cooling off in April.  We would expect a similar trend with Friday’s BLS report.

In February, job growth in the manufacturing industry showed promise by adding 33,000 jobs, but also revealed areas where uncertainty has a dampening effect on job creation. Manufacturers still have a long, long way to go in the economic recovery.    

For the second straight month the vast majority of manufacturing jobs created in February were in the durable goods sector.

Manufacturers are concerned by a number of factors including higher energy prices, misguided federal regulations, and policies that do not support global competitiveness. Policymakers need to join with manufacturers to create an environment that encourages innovation and job creation.

Aric Newhouse is the NAM Senior Vice President for Policy and Government Relations.

Today’s report by the Labor Department that 95,000 jobs were shed in September while the unemployment rate remained unchanged at an elevated 9.6 percent shows that the economy is still struggling and there is much uncertainty in the private sector. Falling for a second consecutive month, for the first time since last December, manufacturing employment edged down by 6,000 in September. While manufacturers overall have added 136,000 to payrolls so far this year, the fact that 99 percent of this increase took place during the first five month of the year shows that the economic recovery is cooling, not gaining steam. This is largely because temporary forces, such as inventory restocking and several fiscal stimulus measures, have largely played themselves out. 

 The main reason for the loss of 159,000 government workers last month was because of declines in temporary Census workers employed to conduct the 2010 Census. Meanwhile, the sluggish 64,000 gain in private sector employment shows that employers remain guarded in their outlook and remain pessimistic with respect to the underlying strength of the recovery.  This is highlighted by the fact that increases in temporary employment, which rose to nearly 50,000 in January, have been edging down ever since and increased by less than 17,000 last month.

 The uncertainty about the underlying strength of the recovery coupled with possible legislative and regulatory actions coming from Washington is continuing to constrict private sector job growth which kept unemployment higher in September than it was 15 months ago when the recession ended in June of 2009.

The Institute for Supply Management (ISM) reported today that its closely-watched manufacturing index fell to 54.4 in September from 56.3 in August.

Manufacturing expanded in September at the slowest pace in 10 months, adding to the mounting evidence that the manufacturing sector is slowing after leading the recovery for the past year. The ISM manufacturing index has fallen four out of the five months since April, and now stands at the lowest level since last November, a clear sign that the recovery continues to struggle.  Transition from economic growth supported by inventory rebuilding and temporary surges from fiscal stimulus to a self-sustaining recovery is proving to be rocky.  The fact that most of the components of today’s report, such as new orders, production, employment and exports, all moderated last month signals that the slowdown in the manufacturing recovery will spill into the fourth quarter as well and that the outlook for jobs remains gloomy.

President Obama will make a statement at 10 a.m. at the White House on today’s new employment report, which showed August unemployment at 9.6 percent.

In the meantime, speculation soars about a September “stimulus” plan. The Washington Post reports, “White House considers pre-midterm package of business tax breaks to spur hiring“:

With just two months until the November elections, the White House is seriously weighing a package of business tax breaks – potentially worth hundreds of billions of dollars – to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses, according to people with knowledge of the deliberations.

Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States.

Running it up the flagpole, eh? Well, salud!

But it all seems so tactical, more a matter of packaging than policy. Take the research and development tax credit, for example. President Obama’s proposed budget for Fiscal Year 2011, released February 1, already called for making the R&D tax credit permanent. If you have to give it a new label, call it “Super Stimulus Innovation Jobs Great Tax Credit for Business, Business, Business,” to get it passed, fine, but the credit — first adopted in 1981 — has proved to be an effective tool for job creation and innovation that should have passed long ago on its merits.  (It’s like the Miscellaneous Tariff Bill: OK if you want to redub it the Manufacturing Enhancement Act, just get it done!)

Dena Battle, tax policy director at the National Association of Manufacturers, appeared on Fox Business News on Thursday to discuss these issues (video). Asked about the new proposals being floated, she said:

Some of the things they are talking about are good ideas. Obviously we support a permanent R&D tax credit. I think what’s really missing here are some other key elements. You’ve got these 2001 and 2003 tax cuts expiring at the end of this year, and Congress has done nothing to extend those. Businesses are looking at that, and they have no idea what tax rates they’re going to be paying next year.

You really have to do something to show businesses and give them that level of certainty right now. That has to be part of anything they’re doing for job creation.

Right. If you read toward the end of the Post story, you see a reference to the White House considering “targeted business tax breaks.” Targeted = tactical.

But as NAM President John Engler argued in his introduction to the NAM’s report, the “Manufacturing Strategy for Jobs and a Competitive America“: [We] have no battle plan, no comprehensive approach for making manufacturing in the United States more competitive, more productive and creating even more high-paying jobs. The unprecedented challenge to U.S. manufacturing pre-eminence requires clear thinking, a global vision and a plan.” That is, a strategy.

UPDATE (10:25 a.m.): President’s White House appearance amounted to a reaffirmation of his proposal for small business loans and extending “middle class tax cuts,” which is to say, letting the bulk of the 2001 and 2003 tax cuts expire. He’ll say more next week.

Today’s Labor Department report on employment shows the job market continues to weaken as does our economic recovery. While manufacturing continues to lead the recovery with employment rising for the seventh consecutive month in July, with 36,000 jobs added, signs still show overall the industry is decelerating. The added jobs in July were largely due to seasonal factors in the auto sector. But changes in most other manufacturing industries were negligible which shows the manufacturing recovery is slowing down. While manufacturing has added 26,000 jobs per-month so far this year, this is still just a small fraction of the 91,000 jobs lost per-month during the prior two years. If this pace is maintained, U.S. manufacturing employment will not return to its pre-recession level for another six years.

Today’s news shows little evidence that the labor market will significantly improve in the next couple of months. After starting to increase last October, temporary employment — a good indicator of future permanent jobs — slowed in recent months and actually declined in July.   

The labor market over the past few months has clearly worsened, with private sector job growth falling 67 percent in the May-July period compared to the three months ending in April. This is a worrisome sign that employer’s confidence in the underlying strength of the recovery is tepid. At the same time, the unemployment rate remained stuck at an uncomfortably high 9.5 percent in July. This will likely weigh on consumer confidence and spending in the near term.