Chalk up the latest batch of Friday reports as a mixed bag at best, a frustrating and perhaps ominous start to summer at worst.
New factory orders increased 1.9% in April, according to the Commerce Department —the biggest bump in six months — with March numbers revised upward to a 1.7% increase from 1.5%. Those numbers are fine. Those numbers, at least this month, are not the problem. The jobs numbers are. They are ugly, and almost a disaster.
The Labor Department reported just 38,000 new jobs added in May — barely one-fifth of the 160,000 initially predicted — with a loss of 10,000 in manufacturing, according to the Alliance for American Manufacturing.
The numbers “are shocking,” AAP president Scott Paul said, “but they come as no surprise to America’s factory workers. While other sectors have seen forms of recovery, manufacturing has only seen about 40% of its pre-recession jobs come back — and this month only brought more job losses.”
Alan Tonelson, who covers the industry on his independent RealityChek blog, noted that the manufacturing jobs recession is now in its 17th month, and that the year-on-year manufacturing job loss had hit 39,000 — its worst since a 73,000 yoy loss in August 2010. Manufacturing jobs as a share of the total U.S. workforce remain at a record low 8.54%.
Unemployment is down from 4.9% to 4.7%, though the overall labor force dropped by 460,000, as noted by Cliff Waldman, director of economic studies for MAPI. He also p highlighted that the number of people working part-time increased by an almost-perfectly corresponding 468,000.
“The economy is bumping up against structural constraints that have been a long time in coming,” Waldman said. “The supply of labor is getting to be an increasingly difficult problem. The slide in productivity performance is turning into a crisis of its own. These require different kinds of policy solutions than we have used in recent decades. But we need to start by taking our head out of the clouds and realizing that the American economy, at least right now, is not in great shape.”
Wages, at least, are up for the 11th straight month, Tonelson said, with the yoy real manufacturing wage up 3.30%.
Among the more prominent reasons for the losses was the goods and services trade deficit, the AAM wrote in its comments on the jobs numbers. The trade deficit “hit $37.4 billion in April, up $1.9 billion in March, …and the goods trade deficit with China hit $26.6 billion.”
Back to new orders numbers for a minute: Transportation equipment orders jumped 8.7%, with motor vehicles and parts up 2.4% on its way to its biggest increase in nine months. Orders for computers and electronics products jumped 2.4% for its biggest increase in a little more than a year, electrical equipment orders ticked up 0.5%, and machinery orders dropped 1.9%.