Labor Market by the Numbers
The big number: Over the first quarter of 2024, there has been a slight reduction in job opening, with the manufacturing industry down 16,000 job openings from December 2023. The number of manufacturing quits decreased to 189,000 in March, below pre-pandemic average and the lowest quits per month since June 2020. Churn, which had been a major issue for manufacturers amid a tight labor market, has decreased to below pre-pandemic levels, quits averaged 203,000 per month pre-pandemic (2017-2019). With less job openings in the industry, manufacturing employees appear to be less eager to quit their current jobs. This may ease wage pressures as well.
Job postings: There were 570,000 manufacturing job openings in March, down from 587,000 job openings in February. Across the broader economy there were 8,488,000 nonfarm business job openings, down 325,000 jobs from February (8,813,000) – the lowest reading since February 2021. Both remained above pre-pandemic levels but there’s been cooling from pandemic highs where the sector faced 997,000 openings in April 2022.
- Durable goods manufacturing job posting increased in March to 353,000 from 379,000 in February. Nondurable goods manufacturing increased to 217,000 open jobs in March from 208,000 jobs in February.
- Total separations decreased from 338,000 to 330,000, the lowest level since May 2020 (323,000)
- For every 100 job openings in the U.S. economy, there were 75.7 unemployed workers.
- Bottomline: There continued to be significantly more job openings than people actively looking for work, even as that ratio narrowed notably in 2023. One year ago, there were only 60 unemployed workers for every 100 open jobs.
Manufacturing employment: Manufacturing employment rose slightly with 12,961,000 manufacturing employees in April 2024, adding 8,000 employees and continuing to be on pace of a record high since the Great Recession. Pre-pandemic (2017-2019) the sector averaged 12,648,000 employees per month. Durable goods manufacturing added 1,000 employees while non-durable goods manufacturing gained 7,000 employees in the sector. For durable goods, machinery manufacturing saw the largest increase with 3,400 employees added while non-durable goods saw the largest increase in food manufacturing industry, adding 4,700 employees.
- The average hourly earnings of production and nonsupervisory workers in manufacturing rose 0.3% to $27.54 in April, with 5.8% growth over the past 12 months. As such, wages continue to rise, albeit at a slower rate, despite slightly softer hiring over the past year.
- Manufacturers continue to cite workforce challenges as their top concern.
Nonfarm payrolls: Nonfarm employment rose by 175,000 in April, building on an upwardly revised 315,000 in March but well below consensus expectation of 240,000. April’s report came in below the average monthly gain of 237,000 over the prior 12 months.
- The unemployment rate increased slightly to 3.9%, with the number of unemployed Americans increasing from 6,429,000 to 6,492,000.
- The labor force participation rate remained at 62.7%.
Key takeaway: The labor market data is beginning to show some signs of slight weakening in the U.S. economy. Job openings are declining, and the unemployment rate rose slightly. However, some key indicators returning to pre-pandemic level, such as the level of quits, which takes pressure of manufacturers to fill more positions.
