Manufacturers’ Analysis of This Morning’s Manufacturing Jobs Figures

WASHINGTON - Feb. 7, 2014 - PRLog -- THE TAKEWAY: Manufacturing employment continued a modest warm streak in January, creating 21,000 net new jobs in a month when overall U.S. hiring disappointed severely once again.  Nonetheless, the sector remains a major employment laggard during the economic recovery, with net new hiring occuring at only one-third the rate for the non-farm economy as a whole.  The non-durable goods sector ended its jobs recession, but still has not generated a single net new job since last February.  If history is a guide, the kinds of new trade agreements President Obama could complete with fast track negotiating authority from Congress will put further downward pressure on manufacturing job creation.

U.S. Business and Industry Council Research Fellow Alan Tonelson released the following analysis of the latest monthly (January) figures contained in this morning’s employment report from the Bureau of Labor Statistics:

>Manufacturing gained 21,000 jobs in January, registering its third 10,000-plus employment improvement in the last four months and contrasting notably with a second straight disappointing hiring performance for the overall nonfarm economy.  (All figures presented on a seasonally adjusted basis.)

>December's manufacturing jobs gain was revised downward from 9,000 to 8,000, but November’s figure was revised upward from 31,000 to 35,000.

>Manufacturing, however, remains a major jobs laggard during the present recovery. The sector has regained only 27.12 percent (622,000) of the 2.293 million jobs it lost from the onset of the recession in December, 2007 through its jobs nadir of February, 2010. By contrast, 90.21 percent of the 8.695 million nonfarm jobs lost during that period have been regained – a performance more than 3.3 times better than manufacturing’s.

> Because of this relatively slow growth, manufacturing’s share of total nonfarm employment in January actually ticked down month-on-month -- from 8.79 percent in December to 8.78 percent.  This level is well below even that reached at the sector's February, 2010 jobs trough (8.86 percent).

>The nondurable goods sector, which represents nearly half of all U.S. manufacturing, ended its jobs recession in January, but still has not created a single net new job since last February.  An economic recession is defined as two straight quarters of GDP contraction.  USBIC defines a job recession as two or more consecutive quarters of cumulative decline.

>Manufacturing’s year-on-year jobs growth continues to trend down.  Between January, 2011 and January, 2012, 217,000 net new jobs were created in manufacturing.  Between January, 2012 and January, 2013, this figure fell to 145,000.  Since January, 2014, manufacturing has created only 93,000 net new jobs.

>Manufacturing's lagging hiring gains lately show that industry’s jobs rebound earlier during the economic recovery was purely cyclical, not structural, and that contrary to President Obama and others, no structural domestic manufacturing renaissance is in sight.

Alan is available for interviews at 202-266-3985 (office direct dial), at 202-746-9366 (cell).