Manufacturing Employment Increases in December

Employment jumped by 23,000.

Both the overall economy and the manufacturing sector received some good news on Dec. 6. The Bureau of Labor Statistics reported that nonfarm payrolls increased by 200,000. This drove the unemployment rate down to 8.7%.

Manufacturing employment jumped by 23,000.

Looking at specific sectors, the strongest monthly gains were transportation equipment (up 8,600), fabricated metal products (up 6,000) and machinery (up 5,300). The largest declines were found in petroleum and coal products (down 2,300), furniture and related products (down 1,400) and plastics and rubber products (down 1,400).

Looking at the overall picture, in 2010 manufacturing created 109,000 jobs and 225,000 were created in 2011, according to Chad Moutray, chief economist, National Association of Manufacturers. Since 2009 the sector has added 334,000 jobs.

"The domestic economy -- particularly among manufacturers -- is starting to rebound after several weak months in mid-2011," said Moutray. "More importantly, recent data suggest that manufacturers are upbeat about production and employment moving forward -- a positive sign for the coming months. Yet, we should also appreciate that significant weaknesses persist in the marketplace. The unemployment rate is still stubbornly high, the housing market is improving but still depressed, economic anxieties about Europe still resonate as well as the uncertainty being created in Washington. These concerns suggest that businesses remain cautiously optimistic about 2012, mindful of the headwinds that still persist around them."

Scott Paul, executive director of the Alliance for American Manufacturing (AAM) points out that while the December numbers are good, this sector has "shed one-third of its employment in the last decade."

Paul says that many challenges lie ahead. "Dampened growth in China and Europe may impact the fortunes of American exporters. Currency manipulation in China and Japan may continue to hamper manufacturing growth in the United States. Congress may impose self-inflicted wounds to our economy by refusing to expand tax breaks for plant and equipment purchases as well as clean energy manufacturing. So, there are no guarantees that manufacturing employment will continue to thrive unless Congress and the President understand exactly what is at stake.

"But, it is clear some policies are working. The auto rescue clearly stabilized the industry, allowing it to add back some capacity and provide a much-needed boost to its supply chain, as well. Trade enforcement actions have provided a level playing field for key manufacturing sectors such as steel and tires.

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