Jobs Report Manufacturing Posts Modest Growth

Jobs Report: Manufacturing Posts Modest Growth

“Clearly, we need to get back to where the sector is growing strongly and adding new workers at a faster pace,” said Chad Moutray, chief economist with the National Association of Manufacturers.

U.S. manufacturers added 6,000 net jobs in July, ending a four-month slide, according to the monthly employment report released today by the Bureau of Labor Statistics. Coupled with yesterday’s news of a robust increase in the ISM manufacturing-activity index, today’s jobs report suggests the manufacturing sector may be rebounding from its first-half slump.

But the longer view provides less reason for optimism. National Association of Manufacturers Chief Economist Chad Moutray noted in his Shopfloor blog that U.S. manufacturers have hired 40,000 workers over the last 12 months—a scant 1.8% of the 2.3 million net nonfarm jobs created in that period. By contrast, the manufacturing sector contributed 10.4% of the new nonfarm jobs in 2010 and 2011.

“Clearly, we need to get back to where the sector is growing strongly and adding new workers at a faster pace,” Moutray said.

Leadership Vacuum

Scott Paul, president of the Alliance for American Manufacturing, said President Obama and Congress need to provide stronger leadership, aimed particularly at reshoring U.S. manufacturing jobs.

“It’s clear the status quo isn’t working,” Paul said. “It’s time for Congress to step up to the plate and pass a manufacturing strategy and jobs plan. And it’s time for President Obama to take concrete action. … There’s a lot the administration could be doing to boost manufacturing right now.”

The auto sector carried the day in terms of job growth for July, posting a net increase of 9,100 jobs. That figure accounted for the lion’s share—and then some—of the overall net gain of 6,000 manufacturing jobs. All of the other manufacturing segments posted either meager gains or losses in net jobs.

“The fact that manufacturers have added workers in July, ending four months of net losses, is definitely a positive sign,” Moutray said. “Yet, when you look beyond gains in the motor vehicle sector, job growth continues to be weak. While we have seen signs of improvement for output and sales … manufacturers continue to be hesitant to add new workers, a trend that will probably continue until they perceive the economic marketplace to be on a firmer footing.”

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