NAM: Monday Economic Report
Manufacturing employment jumped by 54,000 workers in November, bouncing back from the loss of 43,000 employees in October. Much of that volatility stemmed from the effects of the auto strike, with motor vehicles and parts employment up 41,300 in November, rebounding from a similar loss in the prior report.
There were 12,865,000 manufacturing workers in November, the best reading in 11 years, with 1,412,000 employees added since the end of the Great Recession. Nonetheless, manufacturing job growth has slowed to an average of just more than 5,000 additional workers per month year to date. That contrasts with the average of 22,800 manufacturing employees created each month through the first 11 months of 2018.
In the larger economy, nonfarm payrolls increased by a very robust 266,000 in November, the strongest reading since January. The unemployment rate returned to 3.5%, matching the reading in September, which was the lowest since December 1969.
Perhaps buoyed by strong labor growth, as well as renewed strength in the stock market, the Index of Consumer Sentiment improved to the best reading in six months, according to preliminary data from the University of Michigan and Thomson Reuters.
The ISM® Manufacturing Purchasing Managers’ Index® contracted for the fourth straight month, suggesting ongoing weaknesses in the sector in November. While production contracted for the month, it stabilized somewhat in the latest data, falling at a slower rate and bouncing back from the worst reading since April 2009.
New orders for manufactured goods rose 0.3% in October, but were flat with defense sales excluded. Overall, the data continue to highlight weaknesses in the manufacturing sector across the past 12 months, with global softness and trade uncertainties weighing on activity and factory orders down 1.2% since October 2018. On a more positive note, core capital goods spending—a proxy for capital spending—rose 1.1% in October, perhaps a sign of some stabilization in the measure.
The U.S. trade deficit decreased to $47.20 billion in October, the lowest level since June 2018, with goods exports and imports both falling to a two-year low. Encouragingly, real exports of petroleum in 2012 dollars were the highest since the series began in 1994, helping to push the real petroleum trade deficit to a record low in October.
In non-seasonally adjusted data, U.S.-manufactured goods exports have fallen 3.0% year to date through the first 10 months of 2019 relative to the same period in 2018.