Labor Market by the Numbers
The big number: The number of manufacturing quits decreased to 203,000 in December, the slowest pace since July 2020.
- This is a sign that churn, which has been a major issue for manufacturers amid a tight labor market, has eased significantly.
- In fact, the average number of quits per month in the 2017–2019 period was also 203,000, suggesting that churn has returned to a pre-pandemic pace in the sector.
Job postings: There were 601,000 manufacturing job openings in December, with 9,026,000 nonfarm business job openings. Both remained above pre-pandemic rates.
- For every 100 job openings in the U.S. economy, there were 69.4 unemployed workers.
- As such, there continued to be significantly more job openings than people actively looking for work, even as that ratio narrowed notably in 2023. (It was nearly a 2-to-1 ratio one year ago.)
Manufacturing employment: Manufacturing employment rose by 23,000 in January, rising for the third straight month. While job growth in the sector has been more sluggish over the past year, adding just 22,000 workers on net in 2023, there were 12,979,000 manufacturing employees in January 2024, the most since November 2008.
- The average hourly earnings of production and nonsupervisory workers in manufacturing rose 0.3% to $27.22 in January, with 5.3% growth over the past 12 months. As such, wages continue to rise strongly despite softer hiring over the past year.
- Indeed, manufacturers continue to cite workforce challenges as their top concern.
Nonfarm payrolls: Nonfarm employment jumped by 353,000 in January, building on an upwardly revised 333,000 in December and double the consensus expectation.
- The unemployment rate remained at 3.7%, with the number of unemployed Americans declining from 6,268,000 to 6,124,000.
- With that said, the labor force participation rate was unchanged at 62.5% for the second straight month, down from 62.8% in November.
Key takeaway: The surprisingly strong labor market data show that the U.S. economy is very resilient and that it is stronger than conventional wisdom might suggest. Job and wage growth continues to be strong, and employment in the manufacturing sector is at its highest point since the Great Recession.
