Manufacturing Firms Net 19,000 New Hires as Unemployment Falls to Half-Century Low
Hiring jumped in the United States last month. The national unemployment rate dropped one tenth of a percentage point to 3.4%—a 54 year low, according to the Commerce Department—as the private nonfarm economy hired more than half a million people in January. Manufacturing also benefited, adding about 19,000 new jobs with remarkably strong gains in the nondurable goods production sectors. The Department of Labor’s January report showing strong hiring numbers and historically low unemployment comes as many areas of business—manufacturing included—have reported significant trouble with hiring new workers.
In a statement from the Alliance for American Manufacturing, the group’s president Scott Paul credited legislation like the Bipartisan Infrastructure Law and the CHIPS Act but cautioned the Federal Reserve against continuing to raise interest rates, which he said could choke out hiring trends.
“Threats remain, and manufacturing will hit a roadblock if the Fed decides to raise interest rates,” Paul said.
The Bureau of Labor Statistics Employment Situation, released February 3, showed strong growth in nondurable goods manufacturing compared to durable goods companies. Nondurable industries added an estimated total of 15,000 employees last week. The food manufacturing and beverage, tobacco, leather and similar products manufacturing sectors took in the lion’s share with 6,900 and 5,000 new hires respectively, followed by broad gains across the other nondurable goods areas. Those widespread games were offset only by a loss of 3,500 employees in chemical manufacturing.
The larger durable goods sector of manufacturing added a comparatively tepid net 4,000 jobs in January. Despite decent gains across most durable goods sectors, a steep loss of 8,400 workers in transportation equipment manufacturing (including 6,500 in motor vehicles and parts production) offset gains of more than a thousand jobs in nonmetallic mineral products, fabricated metal products, machinery, electrical equipment, and miscellaneous manufacturing.
The employment situation report also found that the average manufacturing workweek in January increased, as did average overtime: During the survey period, the average manufacturing workweek length increased by about 24 minutes to 40.5 hours, while mean overtime increased by 6 minutes to 3.1 hours.
Possibly reflecting the historically tight labor market, wages increased faster in manufacturing than in the rest of the economy, and, as in hiring, grew faster in nondurable goods. Average private hourly wages increased by about 7 cents to $28.26 an hour between December 2022 and January 2023. In the same time frame, average wages in manufacturing rose by 20 cents to $25.84. Average earnings in durable products companies rose by 16 cents an hour to $26.94, while earnings in the smaller nondurable goods portion rose a remarkable 29 cents to $24.05 an hour on average.
