Manufacturing Reports Growth, But Private-Sector Employment Stagnant

Driven by continued strength in new orders and production, economic activity in the manufacturing sector expanded in May for the 10th consecutive month, according to the latest Manufacturing ISM Report on Business.

The report, issued last Tuesday, also showed that the overall economy grew for the 13th consecutive month.

In the manufacturing sector, 16 of the 18 industries surveyed are reporting growth in May. The list includes:

Paper Products; Wood Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Computer & Electronic Products; Furniture & Related Products; Miscellaneous Manufacturing; Plastics & Rubber Products; Primary Metals; Printing & Related Support Activities; Chemical Products; Nonmetallic Mineral Products; Machinery; Apparel, Leather & Allied Products; and Food, Beverage & Tobacco Products.

The only industry reporting contraction in May is Petroleum & Coal Products.

More details from the May 2010 Manufacturing ISM Report on Business are available here.

Unfortunately, the Labor Department's monthly report released on Friday isn't nearly as rosy.

Although U.S. employers added 431,000 jobs in May, and the jobless rate fell to 9.7 percent from 9.9 percent in April, the latest data shows that nearly all that growth came from hiring by the federal government. Some 411,000 workers were hired to work on Census 2010, and those jobs will be ending in a few months. Private-sector employment ticked up only slightly, rising by 41,000.

Getting past the recession depends on consistent, sufficient growth in the private sector labor market. Without that, it appears the recovery will continue to sputter which means, of course, that we're not out of the woods yet, and it's still critically important for you to stay vigilant regarding your suppliers' financial health.