The media reported good news today, stating that November manufacturing employment increased by 27,000 people. The increase was touted as great news and proof that things are getting stronger and stronger in the US economy.
The 27,000 is the seasonally adjusted number, or if you prefer, the number that is adjusted by man as opposed to the actual change in employment. Actual manufacturing employment went down by 3,000 people, not up by 27,000. The real change, down 3,000, was normal for November. The annual year-over-year growth rate slipped lower to 0.5% with the quarterly year-over-year (3/12) rising to 0.4%. A normal decline in manufacturing jobs in December will keep the annual growth rate at 0.5%.
Don’t get me wrong. A 0.5% annual growth rate is better than the 10-year average of -2.1%. Manufacturing is making a comeback, and the prospects for more re-shoring are good (we will cover those in another blog).
But let’s base our economic outlook on fact; there was no surge in manufacturing employment in November. The economy is expanding, but there are no new signs of a long-term economic growth. We are still on track with our forecast for a soft spot in the second half of 2014.