Manufacturing Employment Drops in May

Loss of 8,000 jobs represents third straight month of employment decline in U.S. manufacturing.

U.S. payrolls increased by 175,000 jobs in May but manufacturing continued to suffer from an uncertain economy as revised government data showed the sector had shed jobs for the third month in a row.

Manufacturing employment fell by 8,000 in May and revised data showed that the sector lost 9,000 jobs in April and 4,000 jobs in March.

“This is a terrible jobs report for manufacturing,” said Scott Paul, president of the Alliance for American Manufacturing, who said the loss of 21,000 manufacturing jobs since February was “a direct consequence of our widening trade deficits with Japan and China.”

“Manufacturers have added just 41,000 workers over the past 12 months or just 1.9% of total non-farm jobs created, signifying that the sector’s contributions are well below what we need to see,” said Chad Moutray, chief economist of the National Association of Manufacturers.

He noted that employment declined in both durable (-2,000) and nondurable (-6,000) goods manufacturing. Sectors that showed employment gains included motor vehicles (+2,400), wood products (+1,300), computer and peripheral equipment (+1,100) and chemicals (+900). Industries with job declines included printing (-3,200), machinery (-3,100), food manufacturing (-2,800) and primary metals (-2,200).

Moutray said the May report confirmed that the U.S. economy is modestly growing but said manufacturing "needs to be firing on all cylinders if we are going to have robust economic growth."

“Manufacturing jobs are now down to 8.82% of total nonfarm employment – lower than its 8.86% share at the February 2010 absolute employment low point and far below the 9.96% share it enjoyed when the recession began,” noted Alan Tonelson, an economist with the U.S. Business and Industry Council. He called for President Obama to "immediately begin responding strongly to China's ongoing, job-killing trade and broader economic transgressions."

While manufacturing employment was disappointing, the overall rise in jobs, fueled by the service sector, set off a rally on Wall Street in early trading. The Conference Board noted that the jobs gains showed the negative effects of the sequester and the soft global economy “are being offset by the continued contribution from the revival in the housing market and stronger consumption.”

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