NAM: Monday Economic Report
Manufacturing employment fell by 6,000 workers in March, the first monthly decline in hiring in the sector since July 2017. It was the second straight month of disappointing hiring numbers, with just 1,000 employees added in February.
Yet, even with weaker-than-desired hiring over the past two months, manufacturers have added 18,400 workers per month since the end of 2017, a solid rate overall. Indeed, firms continue to cite a difficulty in obtaining talent as a top concern, and there is an expectation that job growth will rebound to healthy paces in the months ahead.
In the larger economy, nonfarm payrolls increased by 196,000 workers in March, bouncing back from a disappointing February, which added just 33,000 employees. The unemployment rate remained at 3.8 percent in March, continuing to be near 50-year lows.
A new paper uses Burning Glass Technologies data to identify where the open positions in manufacturing occurred in 2018, including the top sectors and states. Overall, this analysis highlights that the top jobs are highly technical, likely requiring specialized skills training and credentials and showcasing just how “modern” manufacturing has become.
The Institute for Supply Management® reported that manufacturing activity bounced back from the lowest point since November 2016 to reflect continued modest expansions in the sector, with the ISM® Manufacturing Purchasing Managers’ Index® up from 54.2 in February to 55.3 in March. Overall, manufacturers cited stronger growth in March—especially relative to the softer data in December.
New durable goods orders fell 1.6 percent in February—weakening after rising 0.1 percent in January—largely on declines in nondefense aircraft and parts sales. Excluding transportation, new durable goods orders edged up 0.1 percent for the month. Over the past 12 months, new durable goods orders excluding transportation and core capital goods orders have risen 3.3 percent and 2.5 percent year-over-year, respectively.
Private manufacturing construction spending increased 0.9 percent in the latest data, up from $66.03 billion at the annual rate in January to $66.61 billion in February. After falling to the lowest level since September 2014 in May ($60.77 billion), construction activity has trended higher since then, which has been welcome news. Retail sales declined 0.2 percent in February, continuing to reflect softer consumer spending than desired since the end of last year. On the other hand, January retail sales were revised higher, up 0.7 percent instead of the original estimate of a 0.2 percent gain. The weaker data over the past two months suggests that Americans have been more cautious in their spending, but sales are still expected to rebound moving forward.