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.

Today’s report by the Labor Department that the unemployment rate fell by 0.4 percentage point  – the biggest drop in a dozen years – to 9.4 percent is an encouraging sign for the economy and should be a boost to consumer confidence early this year.  Also, the 70,000 jobs added in October and November due to revisions from previous reports is a positive signal that the labor market gained more momentum in the fourth quarter than previously thought.  However, the fact that the economy created just 103,000 jobs in December shows that employers remain somewhat cautious in their outlook. 

A closer look at the report shows that in December 80 percent of the private sector job growth was concentrated in just two sectors: leisure and hospitality and education and health services. In other sectors employment edged up just 22,000.

Manufacturing ended 2010 on a somewhat positive note gaining a modest 10,000 jobs and breaking a string of four consecutive monthly losses.  This is consistent with a number of previous reports that showed manufacturing conditions improved last month.   For the year overall, manufacturers expanded payrolls by 136,000 in 2010, the largest yearly gain since 1997.  Still, after falling by 2.2 million during the previous two years, a much-more robust and broad-based economic recovery will be needed for manufacturers to make a more serious dent in the employment losses that occurred during 2008 and 2009.

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.

Today’s employment report clearly shows that the economic recovery continues to sputter in manufacturing.  Clearly, the possibility of tax increases hitting both consumer and small businesses is creating increased uncertainty in the economic outlook.  As a result, businesses are becoming more hesitant to hire. 

For manufacturers, after adding 170,000 jobs through the first seven months of the year, employment fell for a fourth consecutive month in November – further signaling the pace of the manufacturing recovery has slowed since the first half of the year.  The decline in manufacturing employment in November was not driven by any one industry, but rather due to the fact that  13 of the 21 major industries posted moderate employment declines while only eight posted moderate increases. This marks the second consecutive month that a majority of manufacturing industries decreased employment, a troublesome sign that the positive momentum of the recovery is waning. After adding 170,000 jobs during the first seven months of the year, manufacturing employment has fallen 56,000 since July.     

Another concerning sign in today’s report is that after improving in the third quarter, the share of those unemployed who have been out of work for at least six months remained unchanged last month at an alarmingly-high rate of  41.8 percent.  The fact that the long-term unemployed continue to have a difficult time finding jobs is no surprise given the weak employment growth which is being caused, in part, by uncertainty of the strength of the recovery.  Washington policy makers should take today’s news as a warning that the recovery remains very tepid, and in uncertain times, increasing taxes on consumers and businesses is a toxic combination that will further weaken the state of the U.S. economy and manufacturing.

Manufacturing employment changed little in October, falling by 7,000. For the year so far, manufacturing employment has increased by 135,000. However, 99 percent of this increase took place during the first five months of the year, when the fiscal stimulus and inventory rebuilding were providing growth to industry.

Since May, manufacturing employment has been essentially flat, edging up just 1,000.  This indicates that in the wake of these mostly-expired supports for growth, the underlying strength of the recovery has weakened, causing firms to put off hiring plans.

The good news in the report is that the private sector added 159,000 jobs in October, the fourth improvement in the past five months and the single largest increase since April. While the improvement has been gradual, the fact that private sector job growth has been on the rise discounts the likelihood of a double-dip recession in the near-term.

 And while the increase in employment has not been strong enough to reduce the unemployment rate, it is important to keep today’s number in perspective — a year ago the economy shed 224,000 jobs. 

 The economy will have to create a significantly higher number of new jobs for the unemployment rate to decline. In addition, after two months of increases, the labor force actually declined in October as discouraged workers stopped searching for work. Had these unemployed workers remained in the workforce, the unemployment rate would have increased to 9.8 percent last month. The chance of the unemployment rate increasing as workers eventually re-enter the workforce is very high. This could depress consumer confidence and keep the recovery in low gear over the next several quarters.

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 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 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.

Bloomberg, “North Dakota Passes Oklahoma in Drilling Rigs as Baker Hughes Count Rises“: “North Dakota overtook Oklahoma this week as the third-most active state in drilling for oil and natural gas, according to data published by Baker Hughes Inc. The number of North Dakota rigs exploring for and producing oil and gas jumped by two to 128, Baker Hughes said.”

Job Service North Dakota, July 20, “North Dakota’s Unemployment Rate 4.1% for June“: “Job Service North Dakota (JSND) reported that labor statistics released today show North Dakota’s June not seasonally adjusted unemployment rate was 4.1 percent. The rate is 0.9 percentage points higher than May (3.2 percent), and 0.6 percentage points below the same period of prior year (4.7 percent).”

Job Service North Dakota, August 2, “Oilfield Jobs in North Dakota”: “Looking for work in the oil industry? lick on this article for an overview of the industry, wage information, frequently asked questions, and more.”

Bloomberg, August 3, “New York Weighs State Drilling Ban on Natural Gas From Shale“: “Aug. 3 (Bloomberg) — Companies led by Chesapeake Energy Corp. would be banned temporarily from drilling for natural gas in shale in New York under state legislation proposed because of disputes over environmental risks.”

New York State Department of Labor, July 15, Unemployment Rate Dropped to 8.2% in June, Lowest Since April ’09“: “New York State’s seasonally adjusted unemployment rate dropped from 8.3% in May to 8.2% in June 2010, the State Labor Department reported today. This was the state’s lowest unemployment rate since April 2009, when it was 8.1%. …New York State’s economy lost 8,500 private sector jobs (-0.1%) in June 2010, on a seasonally adjusted basis. This was the state’s second straight monthly decline in private sector jobs.”

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.