June's 4,000 monthly net employment increase for manufacturing wasn't enough to prevent the sector from entering its worst seven-month job-creation stretch since April-November, 2013. On an annual basis, moreover, manufacturing's June 161,000 employment improvement was lower than May's 180,000 and its poorest year-on-year performance since the previous May. Largely as a result, manufacturing's share of total nonfarm employment hit a new record low last month – 8.70 percent. And manufacturing wages fell in June month-to-month (by 0.20 percent) for the first time since December – a worse performance than even the flat line turned in by the overall private sector.
Here’s my analysis of the latest monthly (June) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:
- June's preliminary jobs report shows that manufacturing employment rose by 4,000 on net during the month – lower than May's 7,000 improvement, which revisions left unchanged. April's 1,000 net jobs gain for the sector remained unchanged, too.
- The decent June manufacturing employment news ended there, though. Last month's gains were too small to prevent the sector from entering its worst seven-month net job-creation stretch (56,000) since April-November, 2013's 66,000.
- In addition, the yearly manufacturing job advance revealed in the June figures (161,000) not only trailed May's 180,000, but represented the worst such increase since May, 2013-2014's 147,000. the June year-on-year rise was also lower than the 172,000 net new manufacturing jobs created from June, 2013-June, 2014.
- Largely as a result, manufacturing's share of total non-farm employment dropped to a new record low in June – 8.70 percent. At the sector's recessionary employment bottom (February and March, 2010), manufacturing jobs accounted for a much higher percentage of the official U.S. jobs universe – 10.69 percent and 10.67 percent, respectively.
- Since manufacturing hit that last 2010 employment bottom, the sector has regained 885,000 (38.60 percent) of the 2.293 million jobs it lost during the recession and its aftermath. By contrast, the private sector overall lost 8.801 million jobs from the recession's December, 2007 onset through its February, 2010 absolute employment low. Since then, it has since increased net employment by 12.759 million.
- In fact, whereas total private sector employment is now 3.41 percent higher than at the recession's beginning, manufacturing employment is still 10.24 percent lower.
- Far worse than manufacturing's June job creation performance was its wage performance last month. The sector's current dollar wages fell by 0.20 percent on month – the first such drop since last December (0.36 percent). In June, manufacturing wages inched up only by (a downwardly revised) 0.08 percent. Both changes lagged even the private sector's disappointing on-month wage flat line in June and its 0.24 percent improvement in May.
- Just as important, June's year-on-year current dollar manufacturing wage increase was only 1.05 percent – the slowest advance since January, 2012-2013's 0.67 percent. The latest annual increase also trailed the previous June's 1.85 percent and June 2012-2013's 1.89 percent.
- By contrast, overall private sector wages increased by two percent in June year-on-year.
- Since the current economic recovery began, pre-inflation manufacturing wages are up less (8.95 percent) than private sector wages (12.59 percent).
- Manufacturing's wage performance has been even worse after adjusting for inflation. The latest Labor Department figures are from May, and will be updated later this month. But they showed that in real terms, manufacturing wages flat-lined from January through April (with new revisions wiping out that latter month's penny increase), and then sank by 0.38 percent in May.
- Real total private sector wages dropped on a monthly basis in May, too, but by half that rate – 0.19 percent. From January through May, they are down by that same amount.
- Year-on-year, inflation-adjusted manufacturing wages rose in May by only 1.63 percent – less than April's 1.82 percent, which itself was downwardly revised. May real overall private sector wages were up considerably more – by 2.23 percent, though that figure has been revised down as well.
- Moreover, as of these preliminary April data, inflation-adjusted manufacturing wages are down by 1.12 percent since the recovery officially began in mid-2009. Real wages for the entire private sector are up 2.03 percent during this period.
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