Manufacturing Job Growth Weak in April Government Reports

Manufacturing Job Growth Weak in April, Government Reports

At first glance, the April jobs report released this morning looks favorable: The economy added 288,000 nonfarm jobs. But the manufacturing sector contributed a meager 12,000 new jobs to that total.

At first glance, the Labor Department's April jobs report released this morning looks favorable: The economy added 288,000 nonfarm jobs, beating expectations, and the unemployment rate declined from 6.7% to 6.3%.

But the manufacturing sector contributed a meager 12,000 new jobs to that 288,000 total.

"This was a surprisingly weak manufacturing jobs number for April," said Scott Paul, president of the Alliance for American Manufacturing. "The weather-related spring surge just didn’t happen for the manufacturing sector."

Chad Moutray, chief economist with the National Association of Manufacturers, wrote in NAM's Shopfloor blog that he thinks U.S. manufacturers "remain mostly upbeat about this year," but implied that optimism may be fading.

"This report—particularly when combined with Wednesday’s very weak GDP numbers—show that there are some nagging challenges in the labor market and the overall economy," Moutray said. "This tends to dampen enthusiasm and add to manufacturers’ anxieties."

Shot of Adrenalin Needed

The AAM's Paul called on the federal government to ramp up efforts in several areas to help inject some life into the manufacturing sector.

"It’s past time to address some of the challenges facing job creation," Paul said. "We need new investments in infrastructure and a plan to lower the trade deficit in manufactured goods. Without smart policy, a real resurgence in American manufacturing isn’t likely to happen anytime soon."

Moutray echoed those thoughts and cited additional economic-growth impediments, including "having highest marginal tax rates in the world, rising health care costs, an overly aggressive EPA and NRLB, and an anti-competitive tort system."

"For America to maintain our mantle of economic leadership, we need policies at the federal level that help manufacturers seize the opportunities before us, not policies that hold us back," Moutray said.

James Marple, senior economist with TD Economics, called the Labor Department's monthly report "a home run for employment growth" but said two aspects of it concern him.

"Two details in the report put a damper on elated spirits: the reversal in the labor force participation rate and the weak pace of wage growth," Marple said. "Accelerating wage gains are vital to supporting consumer spending. At the same time, the return of discouraged workers to the workforce, which seemed to be occurring over the past three months, is put into doubt by the reversal in April."

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