Key Takeaways: Manufacturing employment rose by 15,000 in January, with the sector continuing to add net new jobs at a solid pace and with average weekly earnings up 2.8 percent year-over-year. The labor market is one of the bright spots in a strengthened U.S. economy, boosted by pro-growth policies and an improved global economy. Today’s jobs numbers should boost the likelihood of another short-term rate hike by the Federal Reserve in March.
The Bureau of Labor Statistics said that manufacturers added 15,000 workers in January, extending the strong hiring gains in the sector seen throughout much of 2017. Manufacturing employment rose by 15,750 per month on average in 2017—quite a turnaround from the sluggish job growth experienced in 2016. This is a sign that firms have continued to accelerate their hiring as the economic outlook has strengthened and demand and production have improved considerably. Indeed, manufacturers have told us that challenges in recruiting new workers is their primary business concern right now. Along those lines, average weekly earnings for production and nonsupervisory employees in manufacturing edged up from $884.87 in December to $888.63 in January. That translated into 2.8 percent growth over the past 12 months, which was encouraging.
Since the end of the Great Recession, manufacturing employment has risen by 1,102,000 workers, with 12.55 million employees in the sector in this report. That is the highest level of manufacturing employment since January 2009.
Overall, nonfarm payrolls were up by 200,000 in January, or slightly higher than the consensus estimate of around 180,000. In 2017, the U.S. economy added 181,083 workers on net each month on average. For comparison purposes, average weekly earnings in the private sector for production and nonsupervisory employees was $750.62 in January, up 2.4 percent from one year ago. Meanwhile, the unemployment rate was unchanged at 4.1 percent for the fourth straight month, continuing to be its lowest level since December 2000.
In January, durable goods manufacturers added another 18,000 workers on net, but employment at nondurable goods firms was off by 3,000. The largest increases were in the transportation equipment (up 5,700), machinery (up 5,400), fabricated metal products (up 3,100), miscellaneous nondurable goods manufacturing (up 2,400), nonmetallic mineral products (up 1,900), computer and electronic products (up 1,300) and wood products (up 1,300), among others. In contrast, there was declining employment in January in the paper and paper products (down 2,200), printing and related support activities (down 1,700), chemicals (down 1,500), furniture and related products (down 1,300), primary metals (down 900) and petroleum and coal products (down 500).
