NAM: Manufacturing Employment Drops In February And March After experiencing solid growth over the past couple of years, manufacturing employment rose in January to 12,985,000 workers, the highest level since November 2008, according to Chad Moutray, Ph.D. and Chief Econ- omist at the National Asociation of Manufacturers (NAM). Since then, manufacturing employment edged down by 1,000 workers in both February and March. The March total of 12,983,000 remained just shy of the more than 14- year high, but with hiring clearly showing signs of stalling. At the same time, the overall labor market remained solid, even with some weaknesses. The unemployment rate edged down from 3.6 percent in February to 3.5 percent in March, continuing to hover around “full employment” levels and just a tick away from
January’s 3.4 percent reading, which was the lowest level since May 1969. The manufacturing sector reported 3,775,000 female employees in March, or 29.1 percent of its total employ- ment. Female employment in manufacturing has risen by 107,000 workers since February 2020, or a gain of 2.9 per- cent. In contrast, male employment in the sector increased by 91,000, or a gain of 1.0 percent, over that time frame. The latest JOLTS report recorded 694,000 manufactur- ing job openings in February, the lowest level in two years, although figures remained elevated. At the same time, nonfarm business job openings dropped to 9,931,000 in February, the first reading below 10 million since May 2021. The 5,936,000 unemployed Americans reported in February translated into 59.8 unemployed workers for every 100 job openings in the U.S. economy, with signifi- cantly more job openings than people actively looking for work, even as that ratio has narrowed notably in the past two months.
Manufacturers remained challenged for the fifth straight month, with the ISM Man- ufacturing Purchasing Managers’ Index falling to 46.3 in March, the lowest reading since May 2020. New orders contracted for the seventh consecutive month, with no- table weaknesses in demand cited in the sample comments. In the ISM® report, raw material prices have declined in five of the past six months, a sign that input costs have continued to moderate. In addition, lead times have con- tinued to narrow, reflecting progress on supply chain challenges. New orders for manufactured goods dropped 0.7 percent in February, and ex- cluding transportation equipment, factory orders decreased 0.3 percent in February. Overall, new manufactured goods orders have decreased 3.2 percent since peak- ing in June 2022 but rose 2.7 percent on a year-over-year basis. New orders for core capital goods inched down 0.1 percent to $75.07 billion in February. This result was not far from Au- gust’s record ($75.38 billion). Core capital goods orders have risen 4.2 percent year- over-year, but they have declined 0.4 per- cent since the August peak. Private manufacturing construction rose 2.7 percent to a record $140.32 billion at the annual rate in February. Private con- struction in the sector has trended strongly higher since bottoming out at $72.46 billion in February 2021. Over the past 12 months, activity has soared 53.8 percent. As such, these data continued to speak to the resil- ience of the manufacturing sector.
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10 April 17, 2023
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