Press Release Summary:
According to Bureau of Labor Statistics, U.S. employment numbers jumped significantly higher in January, with unemployment rate dropping to 8.3%. Nonfarm payrolls grew by 243,000, and manufacturers added 50,000 net new workers. These numbers continue to affirm the rebound and importance of manufacturing to economic recovery. Looking specifically at January 2012 figures, the bulk of new jobs in manufacturing came from durable goods sector, which was up 44,000 for the month.
Original Press Release:
U.S. and Manufacturing Employment Jumps Higher in January
U.S. employment numbers jumped significantly higher in January, according to the Bureau of Labor Statistics, with the unemployment rate dropping to 8.3 percent. Moreover, nonfarm payrolls grew by 243,000, and manufacturers added 50,000 net new workers. These gains were greater than expected, and certainly, much higher than the estimates from ADP released two days ago. Consensus estimates had been for around 150,000 net new jobs with the unemployment rate remaining around 8.5 percent.
These numbers continue to affirm the rebound and importance of manufacturing to our economic recovery. There were 82,000 net new jobs created in the sector in the past two months. This is definitely a sign that manufacturers have picked up their activity of late. Moreover, manufacturers have added 287,000 of the 2,063,000 net new nonfarm payroll jobs generated in the last 13 months (since December 2010); this suggests that nearly 14 percent of all of the jobs generated in that time frame stemmed from manufacturing.
As I noted last month, though, we would be remiss without mentioning the fact that employment remains a significant challenge, even with today's good news. The "real" unemployment rate - which includes discouraged and underemployed workers - is now 15.1 percent, down from 15.2 percent in December and 16.1 percent last year at this time.
There are currently 2.81 million Americans who are classified as "marginally attached to the labor force," with 1.06 million being discouraged workers. This is up slightly from last month. (The civilian labor force also grew last month, from 240.58 million to 242.27 million.)
Looking specifically at the January 2012 figures, the bulk of the new jobs in manufacturing came from the durable goods sector, which was up 44,000 for the month. The largest gains came in fabricated metal products (up 10,900), machinery (up 10,500) and transportation equipment (up 10,300). Nondurable goods sector employment rose by 6,000 in January. In that sector, the strongest growth came in the chemicals (up 2,200), printing and related support services (up 1,700) and beverages and tobacco products (up 1,300) sectors.
The average workweek for manufacturers rose from 40.6 hours in December to 40.0 hours in January. The average amount of overtime edged slightly higher from 3.3 to 3.4 hours. Therefore, the average weekly earnings for manufacturing workers rose from $969.93 to $977.51.
Overall, these numbers show renewed strength in the domestic economy, with employment growth in almost every major industrial sector except information, financial services and government. It mirrors other recent economic indicators showing an uptick in activity since October. Moreover, several sentiment surveys suggest that manufacturers are optimistic about future production and employment in 2012, which should bode well for this year's numbers.
Yet, it is important to remember that significant headwinds both in Europe and in the U.S. The labor and housing markets - while improving - still have a long way to go before they are healthy, and consumer and business optimism is mixed with persistent anxieties. Still, we will take good news when we can get it.