The Bureau of Labor Statistics said that manufacturers added 15,000 net new workers in October, an improvement after softer data in August and September. Speaking of those months, the August and September data were both revised higher, adding another 12,000 employees in total. Year-to-date, the manufacturing sector has generated 128,000 net new workers, or an average of 12,800 over those 10 months. Since the end of 2009, manufacturers have created 704,000 employees on net.
These data suggest that hiring in October returned to the monthly averages that we have seen over the past year. That is an encouraging sign that manufacturers are continuing to add workers consistent with recent increases in demand and output. In addition, manufacturing leaders remain mostly upbeat in their outlook, which should bode well for hiring moving forward in the sector.
At the same time, these numbers underscore the importance of pro-growth, pro-export policies over the coming months. As policymakers debate their next steps post-election, they need to focus on measures that will have an immediate positive impact on the economy such as enacting tax reform, passage of Trade Promotion Authority, reauthorizing the Export-Import Bank, adopting immigration reform, enhancing workforce development and finding long-term infrastructure spending solutions, and other priorities.
Durable goods firms added 14,000 workers on net, with nondurable goods manufacturers hiring another 1,000. The largest monthly increase was seen in the manufacturing sector, up 5,200 workers in October. Other sectors with significant increases included fabricated metal products (up 3,800), furniture and related products (up 3,700), chemicals (up 2,400), plastics and rubber products (up 1,700) and computer and electronic products (up 1,500).
In contrast, there were declining employment numbers observed in the food manufacturing (down 1,500), electronic equipment and appliances (down 1,400), printing and related support activities (down 1,200) and miscellaneous durable goods (down 1,000), among others. In addition, the motor vehicles and parts sector added just 600 workers for the month. Nonetheless, automakers have added 37,400 over the past 12 months, making them one of the stronger manufacturing segments year-over-year.
Average weekly earnings for manufacturing employees were somewhat higher, up from $1,014.29 in September to $1,018.37 in October. That represents a 1.6 percent increase from one year ago, or 5.1 percent over the past two years. While much has been made about sluggish household income growth and the anxieties that still exist on the labor front, these data show that manufacturing employees have fared well as the sector has improved. Despite the higher compensation, the average number of hours was unchanged at 40.8 hours. There were 3.4 average overtime hours, down from 3.5 hours the month before.
Meanwhile, nonfarm payroll employment rose 214,000 in October. This was the ninth straight month with nonfarm payrolls increasing by 200,000 or greater. (This was possible because the August and September data were revised higher, adding another 31,000 to the bottom line and pushing the August figure to 203,000.) The U.S. economy has created 228,500 workers on average each month so far in 2014.
The unemployment rate also fell, down from 5.9 percent to 5.8 percent. This was the lowest level since July 2008. At the same time, the participation rate was 62.8 percent. While that was up from 62.7 percent, it equals the average seen over the past 7 months, and the participation rate overall remains near 30-year lows.
Chad Moutray is the chief economist, National Association of Manufacturers.
