According to the Institute for Supply Management, both new orders and production picked up in June among U.S. manufacturers. Employment, however, did not.
The manufacturing sector of the U.S. economy shed 24,000 jobs last month, with the decline concentrated in motor vehicle and parts, the U.S. Labor Department reported on July 8. "Job losses also occurred in electrical equipment and in paper and paper products," added Kathleen P. Utgoff, the commissioner of the department's Bureau of Labor Statistics. "The number of factory jobs has decreased by 96,000 since August 2004, offsetting gains posted earlier in 2004," she noted.
"Overall, the manufacturing sector has shed 3 million jobs since 2000, and by this point in the recovery [from recession] 2 million of those jobs should have been recovered," observes Peter Morici, a professor at the University of Maryland's Smith School of Business in College Park. "Inexpensive imports are holding down employment in manufacturing and some service activities, clamping down on wages even as [overall] employment continues to grow," he asserts.
However, payroll growth for the larger U.S. nonfarm economy proved to be a bit of a disappointment in June. Employment increased by 146,000, about 50,000 less than many economists expected and below the 150,000 jobs the economy needs to create each month just to keep up with population growth.
The U.S. unemployment rate, which is based on a different survey from payroll employment, fell to 5% in June from 5.1% in May as the number of people not in the labor force increased by 1.2 million.