The U.S. economy added 165,000 nonfarm payroll jobs in April, and there were upward revisions of 114,000 additional nonfarm workers in the months of February and March. The higher February number suggests that job growth in that month was now the highest in almost 3 years. Indeed, for the larger economy, the employment data including the revisions could be perceived as somewhat positive. Yes, we would like to see even greater job gains on a month-by-month basis, but the economy added almost 196,000 workers on average in the first four months of 2013. This is higher than the nearly 183,000 average of 2012.

The unemployment rate fell to 7.5 percent. This is the lowest level since December 2008. At that time, the rate was on its way up, topping off at 10 percent in October 2009. The unemployment rate was 9 percent in April 2011, illustrating its descent in the past two years. Its decline can be explained by two factors: an improving jobs picture and a falling participation rate. In April, the participation rate was unchanged at 63.3 percent. As noted last month, this rate is the lowest since May 1979.

For manufacturers, the news has been less positive. Manufacturing employment was unchanged in April, only slightly lower than the gain of 2,000 workers experienced in March. The revisions to February and March data added 9,000 workers to those two months. Still, over the past 12 months, the sector has actually shed 10,000 workers, illustrating significant weaknesses for manufacturers, especially after July 2012. As we have noted since then, some of the challenges have been slowing domestic and global sales and fiscal and regulatory uncertainties. Recent surveys indicate that this softness persists in March and April data of manufacturing activity on weaker new orders, with hiring continuing to be skittish as long as policies out of Washington continue to provide uncertainty and undue burdens.

Looking specifically at manufacturing sectors, durable goods industries added a net 1,000 workers in April, which was counteracted by a net decline of 1,000 workers from nondurable goods businesses. Manufacturing sectors with employment gains for the month included machinery (up 3,600), transportation equipment (up 3,000, with 2,400 from motor vehicles), fabricated metal products (up 2,500), and food manufacturing (up 2,300). On the negative side, sectors with losses in April were printing and related support activities (down 3,100), apparel (down 2,900), computer and electronic products (down 2,000), wood products (down 1,700), and nonmetallic mineral products (down 1,300).

Reflecting the flat nature of the employment data, overall compensation in the manufacturing sector was also essentially stalled, declining marginally. Average weekly earnings in the sector decreased from $985.73 in March to $982.91 in April. In addition, there were slightly fewer hours worked on average. The average weekly hours in manufacturing in April were 40.7 hours, down from 40.8 hours the month before. Moreover, average overtime hours dropped from 3.4 hours to 3.3 hours.

In short, the manufacturing sector has not performed as well as the larger economy when it comes to jobs gains. This is not to suggest that nonfarm payroll growth is stellar – because it is not – but at least we have seen upward movement in overall hiring. Nonfarm payroll growth is approaching 200,000 on average each month, which is decent and higher than what was seen last year.

Yet, hiring in the manufacturing sector leaves a lot to be desired, going beyond the stalled growth of April. Over the course of the past 12 months, manufacturers have added just over 6,000 workers on net each month. That is well shy of what we like to see coming from the sector, and it is a sign of just how soft new orders and other activity have been for the industry of late. As noted in February in a speech by NAM President and CEO Jay Timmons, we would like to see average monthly job gains of around 20,000. To achieve this “20/20 Vision” – as it has been dubbed – manufacturers will need pro-growth policies stemming from Washington, and it will require stronger economic growth overseas, which will help to drive greater exports.

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

Below is the summary of this week’s Monday Economic Report:

Manufacturers continue to experience significant headwinds in the U.S. and global economy. Global sales continue to struggle, and manufacturers are increasingly worried about the uncertain political and business environment. However, last week’s indicators provided a more positive view of recent improvements in the economic landscape, both here and abroad. (For more on the international perspective, see the most recent Global Manufacturing Economic Update, which was released on Friday, November 2.)

There were 13,000 net new workers hired in the manufacturing sector in October, helping to reverse the downwardly-revised 27,000 jobs lost in August and September, and overall non-farm payrolls rose higher than expected, up 171,000. Combined with revisions in the prior two month’s data, the last jobs report before the election provided some possibly encouraging signs. Yet, it also reflected an unemployment rate that continues to be highly elevated, at 7.9 percent, and total job growth that is well below its potential. Nonetheless, perceived improvements on the jobs front have led to higher consumer confidence, with the Conference Board’s measure up from 61.3 in August to 72.2 in October. Americans have also increased their overall spending, despite dipping into their savings to do so. The savings rate fell to 3.3 percent, its lowest level since November 2011.

Manufacturing activity was more mixed depending on the source. Factory orders rebounded in September after an extremely disappointing August. In addition, the Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) edged slightly higher from 51.5 in September to 51.7 in October, confirming that the sector continues to grow modestly, with new orders picking up. However, hiring continues to be weak, and export sales remain negative. The Markit U.S. Manufacturing PMI showed a similar finding, but with orders easing. Beyond these national surveys, the Chicago and Dallas regions showed signs of weakness. Slowing auto sales have been the culprit in the Midwest, while respondents to the Texas survey were worried about the current political and economic environment. Despite manufacturers’ uncertainty, there is cautious optimism about future orders and production.

This week, all eyes will be on tomorrow’s election, particularly with so many manufacturers concerned about its potential impact. The most recent NAM/IndustryWeek Survey of Manufacturers shows that nearly 79 percent of respondents cited political uncertainties as their top challenge. Beyond the election, the main economic indicator will come on Thursday with the release of new trade numbers. There has been some progress on the economic front in many countries outside of Europe, but persistent weaknesses remain. That should dampen export growth, as we have seen in recent months. Other highlights include the latest on consumer credit, job openings and wholesale trade.

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

The U.S. economy added 163,000 net new jobs in July, its fastest pace since February, according to the Bureau of Labor Statistics. Even with slightly stronger nonfarm payroll growth than expected, job growth remains weak overall, with the unemployment rate edging higher from 8.2 percent in June to 8.3 percent in July.

Manufacturers continue to play an outsized role in employment and output growth, adding 25,000 net new workers in July.  Over the course of the last eight months (since November), the sector has contributed 210,000 net new jobs, or 16.4 percent of the total. The stronger growth in jobs in July stands in contrast to weaker data for the industry elsewhere. Some of this could be the result of seasonal adjustments, as the data that were not adjusted reflected a smaller increase of just 10,000 workers.

The gain of 25,000 for July was primarily the result of higher employment in the durable goods sector, which added 24,000 new workers. Over half of that stemmed from the automotive sector, which was up by 12,800 employees. Other sectors that did well included transportation equipment (up 7,700 without motor vehicles), fabricated metal products (up 5,200), plastics and rubber products (up 1,600), primary metals (up 1,400), chemicals (up 1,100), and food manufacturing (up 1,100). Lower employment was observed in the machinery (down 2,200), paper and paper products (down 1,800), and printing (down 1,400) sectors.

The average workweek for manufacturers was unchanged at 40.7 hours, with the average amount of overtime steady at 3.2 hours. Nondurable good overtime was slightly less, down from 3.3 hours on average to 3.2 hours. This was reflected in earnings, as well. The average weekly earnings for manufacturing workers rose from $975.58 to $976.39.

In short, these numbers show that manufacturing continues to help drive economic growth, with strong production in durable goods industries lifting employment. Yet, it is also clear that more needs to be done for stronger growth moving forward. Manufacturers continue to worry about the future direction of the economy, and other data points to a sector which is stuck in neutral. The larger economy is also weak, with the unemployment rate too high and growth not strong enough to bring it down in any substantive way. (continue reading…)

The Bureau of Labor Statistics reported that the economy added 69,000 net new jobs in May, with manufacturing up just 12,000. This is another disappointing labor report which is consistent with recent weaknesses we’ve seen in the global and domestic marketplace. Several other recent economic indicators have shown growth easing in the spring months. Both manufacturers and consumers are anxious about Europe and uncertain about long-term tax policies. 

The unemployment rate edged slightly higher to 8.2 percent, up from 8.1 percent in April. Looking at the so-called real unemployment rate, which includes discouraged and underemployed workers, that figure rose from 14.5 percent to 14.8 percent.

Manufacturers have increased employment over the past six months by 173,000 net workers, or 16.5 percent of all of the nonfarm payroll jobs added during that time. Since the end of 2009 manufacturing has added 487,000 workers.

The sector remains a bright spot, with outsized contributions to both employment and output but we have to do much better in order to continue to drive economic growth. Manufacturers need policies from Washington which will enable them to invest, create jobs and remain competitive against global competition. Currently they are facing many difficult challenges and headwinds which are negatively impacting job growth.

Durable goods industries added 13,000 jobs in May, with nondurable companies shedding 1,000. The fastest growth was seen in motor vehicles (up 5,800), fabricated metals (up 5,700), primary metals (up 3,800), beverage and tobacco products (up 2,700) and machinery (up 2,500).

Chad Moutray is chief economist, National Association of Manufacturers.