The vast majority of manufacturers–92.5 percent–in Q3 2018 said they have a positive outlook for their businesses, according the NAM’s most recent outlook survey, and the just-released September employment data from the Bureau of Labor Statistics (BLS) shows that optimism is well-placed. As proof of the economy’s swift upward trajectory, the non-farm unemployment rate fell to 3.7 percent–the lowest level since December 1969.
The manufacturing data reinforce this picture of robust economic health. The BLS reported that manufacturers added 18,000 workers in September, and more importantly, it revised the July and August figures upward by a significant amount. Those revisions increased manufacturing employment by a total of 12,000 workers. Overall, the data continue to show strong hiring in manufacturing, with the sector generating 23,167 workers on average each month over the past 12 months. That is consistent with healthy growth in the manufacturing sector, including solid demand and production, not to mention the record-breaking overall outlook. Manufacturers’ optimism for 2018 is on track to be the highest annual average in the outlook survey’s 20-year history.
Since the end of the Great Recession, manufacturing employment has risen by 1,294,000 workers, with 12,747,000 employees in the sector in this report. Turning to income growth, average weekly earnings for production and nonsupervisory employees in manufacturing rose to $908.10 in September, up 3.5 percent from $877.38 in September 2017. This too supports the rosy outlook of the survey; manufacturers project that wages will continue growing at the fastest pace in 17 years.
Meanwhile, nonfarm payroll employment increased by just 134,000 in September, the slowest monthly pace in one year and well below the consensus estimate of around 180,000. With that said, weather conditions, specifically with Hurricane Florence, likely pushed the data lower. On the positive side, the July and August data were revised higher, adding another 87,000 workers in total to those months. Nonfarm payrolls have risen by a solid 211,417 per month on average over the past 12 months.
Last, durable and nondurable goods manufacturers added 17,000 and 1,000 employees, respectively. The largest increases included fabricated metal products (up 3,700), nonmetallic mineral products (up 2,700), food manufacturing (up 2,600), chemicals (up 2,400), computers and electronic products (up 2,100), furniture and related products (up 1,900) and machinery (up 1,700), among others. In contrast, employment in several manufacturing sectors declined, including apparel (down 1,800), miscellaneous nondurable goods (down 1,300), textile mills (down 800), motor vehicles and parts (down 400) and printing and related support activities (down 300).