Manufacturing: The Weak That Still Is

ByJohn S. McClenahen Forty years ago David Frost hosted a humorous, satiric television show titled "That Was The Week That Was." For the U.S. manufacturing economy in 2003 there's nothing funny about its condition: The Weak That Still Is. As the Federal Reserve's interest-rate setting Federal Open Market Committee prepares to meet tomorrow, May 6, many manufacturing executives are still trying to sort out April's U.S. employment numbers, reported last Friday. The number of people on payrolls declined by 48,000 last month, and the nation's overall unemployment rate edged up to 6% from March's 5.8%, the U.S. Labor Department said. Compared with "steep" job losses in February and March, April's overall decline was "at a more moderate pace," stated Kathleen P. Utgoff, the commissioner of the department's Bureau of Labor Statistics. But moderate is not a word that describes the 95,000 U.S. manufacturing jobs lost last month. It was largest number of jobs lost in manufacturing in 15 months and was more than twice the average number of jobs that U.S. manufacturing had lost each month since April 2002. Autos, fabricated metals and electronic equipment were among the biggest job-losing manufacturing sectors as the factory workweek fell by three-tenths of an hour to 40.5 hours in April and overtime was down by a tenth of a hour to 3.9 hours, said Utgoff. "It looks as though industrial production plunged 0.8% in April . . . which means [capacity utilization] rates fell to a 20-year low of 73.9% from 74.8% in March," says David A. Rosenberg, chief North American economist at Merrill Lynch & Co., New York. "That would mark a new cycle low for industry operating rates, which we can tell you is an event that has never happened this far into a post-recession phase."