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Manufacturing Employment February and March 2023
- After experiencing solid growth over the past couple of years, manufacturing employment rose in January to 12,985,000 workers, the highest level since November 2008. Since then, manufacturing employment edged down by 1,000 workers in both February and March. The March total of 12,983,000 remained just shy of the more than 14-year high, but with hiring clearly showing signs of stalling.
- At the same time, the overall labor market remained solid, even with some weaknesses. The unemployment rate edged down from 3.6% in February to 3.5% in March, continuing to hover around “full employment” levels and just a tick away from January’s 3.4% reading, which was the lowest level since May 1969.
- The manufacturing sector reported 3,775,000 female employees in March, or 29.1% of its total employment. Female employment in manufacturing has risen by 107,000 workers since February 2020, or a gain of 2.9%. In contrast, male employment in the sector increased by 91,000, or a gain of 1.0%, over that time frame.
- The latest JOLTS report recorded 694,000 manufacturing job openings in February, the lowest level in two years, although figures remained elevated. At the same time, nonfarm business job openings dropped to 9,931,000 in February, the first reading below 10 million since May 2021.
- Manufacturers remained challenged for the fifth straight month, with the ISM® Manufacturing Purchasing Managers’ Index® falling to 46.3 in March, the lowest reading since May 2020. New orders contracted for the seventh consecutive month, with notable weaknesses in demand cited in the sample comments.
- New orders for manufactured goods dropped 0.7% in February, and excluding transportation equipment, factory orders decreased 0.3% in February. Overall, new manufactured goods orders have decreased 3.2% since peaking in June 2022 but rose 2.7% on a year-over-year basis. As such, manufacturing activity has pulled back modestly since last summer.
- Manufacturing production declined 0.5% in March following gains in both January and February (up 1.5% and 0.6%, respectively). Since April 2022, when manufacturing production reached its highest level since the end of 2018, output in the sector has pulled back 1.3% on weaker global growth and ongoing geopolitical and economic uncertainties. The current forecast is for manufacturing production to decline 1.3% in 2023 but expand 1.8% in 2024.
- At the same time, manufacturing capacity utilization decreased from 78.6% in February to 78.1% in March. For comparison, this figure hit 79.9% in March and April 2022—the highest level since July 2000. The Small Business Optimism Index from the National Federation of Independent Business declined from 90.9 in February to 90.1 in March, averaging 90.3 over the past four months. Overall, small business owners continued to express anxiety about the economic outlook and, with recent banking issues, concern about access to credit.
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