Industry Market Trends

Labor Report: Despite Employment Surge, Manufacturing Jobs Fell in June

Jul 09, 2013

The latest Department of Labor jobs report reveals that even with the creation of 195,000 non-farm jobs in June, the manufacturing sector lost 6,000 jobs during the same month. In a response to the report, Scott Paul, the president of the Alliance for American Manufacturing (AAM), noted that such a setback will hinder President Barack Obama's goal of creating one million new manufacturing jobs during his second term, an effort that is "off to a terrible start."

The June labor report, released last Friday, shows that U.S. employment rose in several areas last month. Sectors with gains included some lower-paying industries, such as leisure and hospitality and retail trade, as well as professional and business services, health care, and financial services. Manufacturing, however, suffered a loss of 6,000 jobs, a slight decline from the 7,000 jobs lost in May, on top of 7,000 positions lost in April. For manufacturing thus far in 2013, the largest monthly employment surge was in February, with a gain of 23,000 jobs.

Part of Obama's 2012 presidential campaign was the goal of adding 1 million manufacturing jobs during his second term. Using job data from the Bureau of Labor Statistics, the AAM tracks the progress on a monthly basis, reflected on its AAM Meter. It currently shows that the nation needs to add 987,000 more manufacturing jobs -- or 23,000 per month -- to reach the goal.

In his February 2013 State of the Union Address, the president emphasized such goals are in progress, noting that his administration's first priority is "making America a magnet for new jobs and manufacturing."

Obama noted, "After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three. Caterpillar is bringing jobs back from Japan. Ford is bringing jobs back from Mexico. After locating plants in other countries like China, Intel is opening its most advanced plant right here at home. And this year, Apple will start making Macs in America again."

The manufacturing sector was quick to respond to the latest jobs report reflecting losses, including a released statement by the AAM.

"The economy is producing jobs, but they are, generally speaking, lousy ones. Goods-producing, family supporting industries like manufacturing are falling behind," said Paul.

He also emphasized that the administration will not reach its job goal for the sector without policy change. "First, the trade deficit must come down through a combination of aggressive enforcement of trade laws and halting the currency manipulation of countries such as Japan and China. Second, we must invest in infrastructure, innovation, and the manufacturing workforce. America will only win by adopting 'high road' strategies such as these."

Chad Moutray, the chief economist of The National Association of Manufacturers (NAM), noted on his blog, "Manufacturers hired 236,000 workers in May, up from 201,000 in March and 222,000 in April. Even with the movement in the right direction, the pace of hiring remains subpar, as it remains below the 261,000 level observed 12 months ago (and the 381,000 hired in May 2007 prior to the recession)."

According to NAM's latest state data, the top five states that have the highest manufacturing employment as a percentage of total statewide employment are:

1)      Indiana, 16.4 percent

2)      Wisconsin, 16.1 percent

3)      Arkansas, 13.6 percent

4)      Michigan, 12.8 percent

5)      Alabama, 12.7 percent


By contrast, the bottom five states are:

1)      Hawaii, 2.2 percent

2)      Wyoming, 3.1 percent

3)      Nevada, 3.3 percent

4)      New Mexico, 3.6 percent

5)      Montana, 3.9 percent