William Ng

March 9, 2015

3 Min Read
Manufacturing Employment Growth Weak in Strong February Jobs Report

While the US labor market expanded impressively once again in February with 295,000 jobs, manufacturing employment added only 8,000 positions, symptomatic of the sector's growing stagnation in recent months.

The February headline jobs number shattered the 240,000 jobs forecasted by economists, but the latest Labor Department figures, released last Friday (March 6), revealed weak jobs growth in most manufacturing categories. Durable goods industries added 11,000 jobs, but payrolls among nondurable goods manufacturers shrank by 3,000 positions.

The Labor Department also revised down slightly manufacturing's job additions in January, from 22,000 in its earlier report to 21,000. The department revised the nation's total January job growth from 257,000 to 239,000.

Still, the nation has averaged 288,000 monthly job gains in the last three months and added at least 200,000 new jobs each month for the past 12 months -- something it hadn't done in more than 20 years. Also, the US unemployment rate dwindled down to 5.5%, a level last seen in May 2008.

MORE FROM DESIGN NEWS: Factory Orders Slip in January, but Machinery Orders Bounce Back

The US labor market since has recouped all the jobs it lost to the recession, and the 141.1 million nonfarm-working Americans counted in February are 5 million more than during the same month last year. Approximately 8.7 million Americans remain unemployed, compared with 10.4 million without jobs a year ago. The manufacturing sector currently employs 12.3 million people, or nearly 30,000 more than a year ago.

In February, the manufacturing workweek was unchanged at 41 hours, and factory overtime edged down 0.1 hour to 3.4 hours. Across the nation, average hourly wages grew by merely 3 cents, after a 12-cent jump in January, indicating still sluggish wage growth, which could slow consumer spending.

US economic growth in the short term likely will depend on domestic consumer demand and spending, in the midst of global economic headwinds. Struggles in the Eurozone and the slowdown in China, combined with a strong dollar, have hurt exports and manufacturing. As a result, factory orders, measured by the Commerce Department, have contracted six consecutive months since last August, and the Institute for Supply Management's manufacturing index lost momentum for the fourth straight month in February, with a contraction in exports and a sharp drop in factory employment growth.

MORE FROM DESIGN NEWS: ISM's US Manufacturing Index Slips Again, but Markit's PMI Shows Acceleration

The latter corroborates the Labor Department's latest round of manufacturing employment numbers. In manufacturing, companies responsible for petroleum and coal products shed 5,700 jobs in February, dragging down overall nondurable goods industry employment into negative territory despite additions in food, chemicals, and plastics and rubber manufacturing.

Employers in computers and electronic products added 2,400 jobs, and those in transportation equipment added 2,200. Payrolls at machinery makers expanded by 1,700, electronic instruments by 1,900, fabricated metal products by 2,700, and semiconductors and electronic components by 400.

The plunge in oil prices continued to hit the energy sector. Employment in mining, which include oil and gas, declined by 9,300 jobs, with 7,400 positions lost in support activities while employment in oil and gas extraction slipped by 1,100 jobs.

Construction, however, added 29,000 jobs, while transportation and warehousing expanded by 18,500.

Will Ng is a perfectionist who has been in business journalism for more than 15 years, many of which have been devoted to covering manufacturing, technology, and industry. A writer first, he loves to tell a good story and enjoys reporting on market trends and news.

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