Manufacturing shed 2,000 jobs in May, the second month of declines for the industry in the past quarter, according to the Bureau of Labor Statistics.
What’s going on: Manufacturing has added just 10,000 workers year to date, a significant slowdown from the 385,000 and 390,000 employees in 2021 and 2022, respectively.
- However … there were 12,984,000 manufacturing employees in May, just shy of the 12,988,000 in February, the highest number in more than 14 years.
Earnings are up: Average hourly wages of production and nonsupervisory employees in the sector increased 0.6%, from $26.03 in April to $26.19 in May.
- Manufacturing wages saw 4.9% growth in the past 12 months, which is an increase from the 4.7% year-over-year growth in April.
The bigger picture: Overall, U.S. employers added 339,000 new workers in May, an increase from April’s 294,000.
While the U.S. economy has added 1,570,000 workers through the first five months of 2023—a strong pace—the U.S. unemployment rate increased to 3.7% in May from 3.4% in April
The largest employment gains in manufacturing in May occurred in transportation equipment (up 10,500, including 6,800 for motor vehicles and related parts), electrical equipment, appliances and components (up 2,100), primary metals (up 2,000), chemicals (up 1,700), wood products (up 800) and miscellaneous nondurable goods (up 300).
What’s down: The biggest employment declines in the sector in May occurred in furniture and related products (down 4,000), machinery (down 2,400), fabricated metal products (down 2,300), printing and related support activities (down 2,000) and textile mills (down 2,000), among others.
The NAM says: In May “the labor market remained solid, with wages continuing to increase at healthy paces despite some deceleration from the 40-year highs seen last spring,” said NAM Chief Economist Chad Moutray.
- More positively, there were 12,984,000 manufacturing employees in May, or just shy of the 12,988,000 in February, which was the most since November 2008. In addition, the average hourly earnings of production and nonsupervisory workers in manufacturing rose 0.6% to $26.19 in May, with 4.9% growth over the past 12 months.
- Private manufacturing construction soared 8.7% to a record $188.96 billion in April, rising by a whopping 104.6% over the past 12 months. The data speak to the very sizable investments being made in the manufacturing sector, with firms strongly expanding their capacity to meet their long-term objectives. This should bode well for future growth in manufacturing in the U.S. moving forward.
- Manufacturers remained challenged for the seventh straight month, with the ISM® Manufacturing Purchasing Managers’ Index® edging down from 47.1 in April to 46.9 in May. The headline number was pulled lower by sharply contracting new orders, but encouragingly, production expanded for the first time since November 2022 and exports stabilized. Raw material prices fell for the sixth time in the past seven months, and supply chains continued to improve.
- Manufacturing labor productivity fell 2.5% at the annual rate in the first quarter of 2023, declining for the sixth time in the past seven quarters. Output in the sector declined 1.0% in the first quarter, extending the 3.7% decrease in the fourth quarter.