(What’s Left of) Our Economy: US Manufacturing Employment Is in a Downdraft – News Block

The manufacturing jobs results in last Friday’s official monthly US employment report were bearish because 2,000 jobs were shed between April and May, and because that represents two months of losses out of the last three. The domestic industry has not experienced such a rough patch since late 2019 to the depth of the devastating but brief CCP virus-induced nosedive of the entire economy.

And to add insult to injury, the reviews were negative. April’s initially reported gain of 11,000 was downgraded to 10,000, and March’s losses were revised lower for a second time, from 8,000 to 12,00, the worst monthly reading since the collapse of 42,000 in April 2021.

In fact, these collective setbacks pushed manufacturing further into a state of lagging employment post-pandemic. Since February 2020, the last month with complete data before the CCP virus pandemic began to affect and distort the entire economy, the number of manufacturing employees increased by 1.56%, down from the 1.61% calculable from last month’s release.

Over the same period, nonfarm payrolls (NFP, the definition of the US government jobs national universe) rose 2.45 percent, an improvement from the calculable 2.10 percent last month. And the number of private sector employees rose 3.04 percent, an improvement from a calculable 2.78 percent last month.

Not surprisingly, then, the share of manufacturing in US employment continues to decline. from the new jobs report, stood at 8.32 percent of NFPs, down from an estimate of 8.35 percent last month and 8.39 percent just before the CCP virus hit the state in force. And it accounted for 9.73 percent of private sector employment, down from a calculable 9.76 percent last month and a calculable 9.87 percent in February 2020.

The biggest May job gainers among the broader manufacturing subsectors tracked by Washington were highly concentrated in a handful of industries:

>in the large and diverse transportation equipment sector, 10,500 jobs were added sequentially, and the gain of 6,700 initially reported in April was updated to 10,600. In total, transportation equipment companies have now posted four straight months of strong job creation, and their employment levels are now 4.78 percent higher than in February 2020 immediately before the pandemic from an estimable 3.81 percent last month ;

>electrical equipment, appliances and components, where a sequential gain of 2,100 jobs snapped a two-month losing streak and marked the best performance for these companies since March 2022, with an increase of 3,000. As a result, employment levels in this sector have now advanced 2.04% during the era of the CCP virus and its aftermath, up from an estimated 0.98% improvement last month.

>primary metal manufacturing, whose 2,000 job gains marked a fourth straight month of gains. The monthly rise was also the largest for these companies since they hired 1,200 net new workers last October. Primary metal makers’ payrolls have now moved within 2.50 percent of their February 2020 level, up from a calculable 2.98 deficit last month; and

>Big chemical industry, which improved employment by 1,700 and pushed its pandemic-era headcount growth further to 7.52 percent, compared with an estimable 7.49 percent last month.

May’s losers among these broads were broad-based, with the biggest being:

>furniture and related products, where a reduction of 4,000 jobs was its worst performance since last November’s reduction of 4,200. Due to this drop, the workforce in the sector is now 5.29 percent less than in February 2020 immediately before the pandemic, compared to 3.70 percent computed last month;

>machinery, whose drop of 2,400 jobs was its worst performance since the drop of 6,500 in November 2021. This decline, plus some negative revisions, depressed the workforce in this diverse sector to 0.95 percent above its February 2020 level, up from an estimate of 1.24 percent increase last month.

This poor performance of the machinery is important because the widespread use of its products for expansion and modernization makes it an important barometer of the health of both the rest of the industry and the entire economy; and

>manufacturing of metal products, another large sector that cut 2,300 jobs. While the number of employees at these companies had been close to 0.94% of its level just before the arrival of the CCP virus, it is now back down to 1.21%.

Besides machinery, reality check has consistently tracked another industry since the virus began to destabilize the US economy: autos, whose fortunes have played so often and so heavily in determining those of manufacturing as a whole during the pandemic period.

As the strong hiring performance of the transportation equipment sector suggests, April was a return to this pattern, with vehicle and parts manufacturers adding payrolls by 6,800. Additionally, April’s initially reported hiring increase of 5,800 was revised to 9,000, the best such performance since last December’s burst of 9,500.

This recent increase has boosted auto employment 8.42 percent higher than in February 2020, up from a calculable 7.18 percent last month.

reality check It has also been monitoring several narrower sectors that have garnered special attention during the CCP virus era, but where data is always a month behind that of previous broader sectors, its employment performances in April were generally mixed.

Despite the US government’s decision to provide significant subsidies to encourage more semiconductor manufacturing in the United States, the sector’s employment record for April continued a weak streak that began in January. The loss of 800 jobs in April in the semiconductor and related devices category marked the sector’s fourth straight monthly decline, and the gain of 300 initially reported in March is now seen as a sharp drop of 1,700.

These dismal results, no doubt due at least in part to the return of glut conditions in many types of microchips, dragged job gains at these companies to 8.86 percent above pre-pandemic levels, up from a calculable 9.20 percent improvement last month.

Aircraft manufacturers lost jobs for the second straight month in April, with the 1,300 drop, the worst monthly performance since May 2021’s 4,100 drop. Along with the mixed reviews, April’s drop meant the aircraft workforce is now 3.62 percent smaller than it was before the arrival of the CCP virus from an estimate of 3.29 percent last month.

Hiring by engine and engine parts manufacturers in April fell for the first time in three months as these industries cut headcount by 300. However, the decline was only the first since July 2021 and followed a March jump of 1,000 that was not revised. So employment at these companies fell further below its February 2020 levels, but only to 6.66 percent versus a calculable 6.33 percent last month.

By contrast, in non-powered aircraft parts, the labor force expanded for the fifth straight month, the longest period of growth since the months between January and June 2019. The gain of 400 was also notable because it followed a March increase that upgraded from 600 to 800. Jobs at the non-powered aircraft parts maker rose within 14.10 percent of its immediate pre-pandemic total, compared with the deficit of 14 .62 percent calculable last month.

But job totals for manufacturers of surgical devices and supplies fell by 500 in April. And the initially reported March flatline result for companies that produced many of the products used to fight the virus is now considered to be a reduction of 200. So while last month these workforces were pegged at 1.23 percent higher than their February 2020 levels, this growth has now slowed to 0.57 percent.

The drug and pharmaceutical sector fared much better in terms of hiring, with its 1,500 net new jobs, its best performance since January’s 1,700. This improvement, plus positive reviews, saw employment in this sector increase by 15.09% during the era of the CCP virus and its ongoing aftermath compared to a calculable 14.54% increase last month.

And the vaccine-containing pharmaceutical subsector added 800 jobs for its best employment month since last June and its increase of 900. The workforce of these vital health security companies is now 20.61 percent higher than it was in February 2020, just before the CCP virus took effect, up from an estimate of 19.80 percent last month.

Undoubtedly, domestic manufacturing data has a habit of producing pleasant surprises. (See, for example, the latest production figures.) But with the economy generally losing momentum, and foreign markets that normally buy so much domestically made goods are not doing any better, any short-term improvement in US manufacturing employment will be just that: a pleasant surprise.

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