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NAM Monday Economic Report: Burst of jobs - Hiring continued to rise solidly in July

By: Dr. Chad Moutray, Chief Economist, National Association of Manufacturers

August 8, 2022

  • Manufacturing employment increased by 30,000 in July. The labor market remains a bright spot in an economy that has seen softening in other areas. Through the first seven months of 2022, the sector has hired 271,000 employees, building on the 365,000 workers added in calendar year 2021, the most since 1994. Currently, the manufacturing sector has 12,826,000 employees.

  • The average hourly earnings of production and nonsupervisory workers in manufacturing rose 0.3% to $25.09 in July, up 5.0% from one year ago.

  • The U.S. economy added 528,000 nonfarm payroll employees in July, and the unemployment rate edged down to 3.5% in July, the lowest since February 2020. The labor force participation rate ticked down from 62.2% to 62.1% and remained well below pre-pandemic levels.

  • There were 790,000 manufacturing job openings in June, pulling back for the second straight month from April’s record 1,017,000 postings in the sector but remaining highly elevated. Over the past 12 months, job openings in the sector have averaged nearly 865,000.

  • There were 10,698,000 job openings nationally in June, with 5,912,000 unemployed Americans. That translated into 55.3 unemployed workers for every 100 job openings in the U.S. economy, speaking to the extreme tightness of the labor market, even with some recent cooling.

  • New orders for manufactured goods jumped 2.0% from $544.4 billion in May to a record $555.2 billion in June. Excluding transportation equipment, manufacturing orders increased 1.4% from $456.1 billion to $462.4 billion, an all-time high, with durable goods orders excluding transportation up 0.4% for the month.

  • New orders for core capital goods (or nondefense capital goods excluding aircraft)—a proxy for capital spending in the U.S. economy—rose 0.7% from $73.5 billion in May to a record $74.0 billion in June. Core capital goods orders increased a solid 8.6% over the past 12 months.

  • Overall, the factory orders data speak to continued resilience in the sector despite worries about the economic outlook and lingering supply chain, workforce and inflationary concerns.

  • Yet manufacturing activity expanded very modestly in July, but with the ISM® Manufacturing Purchasing Managers’ Index® slipping to 52.8 in July, the lowest reading since June 2020, and new orders contracted for the second straight month. Prices decelerated sharply in July, with that reading plummeting to its lowest level since September 2020. Even with slower growth, costs continue to rise solidly.

  • The U.S. trade deficit fell from $84.91 billion in May to $79.61 billion in June, the lowest reading since December and pulling back for the third straight month—from the record $107.65 billion reading seen in March. Goods exports rose to a new all-time high, and goods imports edged lower for the month. The goods trade deficit ($99.48 billion) was the lowest since November.

  • Private manufacturing construction spending edged down 0.1% from a record $92.43 billion at the annual rate in May to $92.31 billion in June. Even with a slight decline in the latest data, private construction activity in the sector has trended strongly higher since bottoming out at $72.46 billion in February 2021.

CLICK HERE for the full NAM Monday Economic Report for August 8, 2022.