Labor Market by the Numbers
The big number: Wages for nonsupervisory and production workers in manufacturing have outpaced inflation (Consumer Price Index) on a year over year basis for each of the last 12 months.
Job postings: There were 516,000 manufacturing job openings in April, down from a downwardly revised 546,000 job openings in March. Across the broader economy there were 8,059,000 nonfarm business job openings in April, down 296,000 jobs from March (8,355,000) and a whopping 1,845,000 in the last year. This is the lowest reading since February 2021. However, both remained above pre-pandemic levels with manufacturing still up 86,000 job openings and the broader economy up 1,265,000. However, there’s been cooling from pandemic highs where the sector faced 997,000 openings in April 2022.
- Durable goods manufacturing job openings decreased to 340,000 in April from 355,000 in March. Nondurable goods manufacturing decreased to 175,000, down from 191,000 in March.
- Separation increased to 385,000 from 332,000 in March. This is the highest separations have registered since August 2023 and reversing trend for the first time in 2024.
- Quits increased to 225,000 up from 186,000 in March, also reversing a trend of declining for the previous four months.
- For every 100 job openings in the U.S. economy, there were 80.1 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. Looking beyond openings, a sustained focus on retention is essential for manufacturers.
Manufacturing employment: Manufacturing employment rose slightly with 12,965,000 manufacturing employees in May 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 lost 2,000 employees while non-durable goods manufacturing gained 10,000 employees in the sector. For durable goods, wood product manufacturing saw the largest increase with 1,200 employees added while non-durable goods saw the largest increase in chemical manufacturing, adding 4,700 employees.
- The average hourly earnings of production and nonsupervisory workers in manufacturing rose 0.4% to $27.64 in May, with 5.7% growth over the past 12 months.
- Even with this slight cooling, manufacturers continue to cite workforce challenges as their top concern.
Nonfarm payrolls: Nonfarm employment rose by 272,000 in May, well above consensus expectation of 190,000. May report came in above the average monthly gain of 230,000 over the prior 12 months.
- The unemployment rate increased to 4.0%, the highest since January 2022 with the number of unemployed Americans increasing from 6,492,000 to 6,649,000.
- The labor force participation rate dropped to 62.5%.
Key takeaway: The labor market data has been mixed. Job openings are down significantly over the past year, the unemployment rate ticking up slightly, and labor force participation down. However, employment and wage growth remain strong.
