As factories, research labs, and technology centers flung open their doors for Manufacturing Day festivities around the country, the news on the jobs front was less celebratory. The U.S. manufacturing sector lost 9,000 jobs in September, adding to the 18,000 manufacturing jobs lost in August, according to the monthly jobs report from the Bureau of Labor Statistics.
Overall in the economy, the unemployment rate was unchanged from August at 5.1%. Total nonfarm employment increased by 142,000. The healthcare and information sectors saw job gains.
Scott Paul, the president of the Alliance for American Manufacturing (AAM), said in a statement that weakness overseas coupled with a strong dollar and foreign currency devaluations contributed to the decline, along with overproduction in China and “a paucity of public investment in the U.S.”
Employment for durable and nondurable goods was down 5,000 and 4,000 respectively. Primary metals was down 4,500, machinery down 3,500, computer and electronic down 2,800 and miscellaneous durable goods down 2,300. Furniture and related products were up 3,300, transportation equipment up 2,900 and wood products up 2,700.
Compensation for manufacturing jobs was also down. Average weekly earnings fell from $1,098.60 in August to $1,088.95 in September.
In a blog post, Chad Moutray, chief economist for the National Association of Manufacturers (NAM), called the report “discouraging,” showing “just how sluggish growth has become in the manufacturing sector over the past few months, mirroring the stagnant ISM data released yesterday.”
“Manufacturers have grappled for much of this year with headwinds from abroad, a strong U.S. dollar, gridlock in Washington on critical market-opening policies and lower crude oil prices—each of which have combined to dampen demand, production and hiring.”
Moutray predicted the softness of the jobs numbers will reduce chances for a short-term rate increase from the Federal Reserve at their meeting in late October.
“Conventional wisdom still holds that the Federal Open Market Committee will begin the process of raising rates at its December 15-16 meeting, particularly given the Fed’s desire to act by year’s end,” he wrote. “But that decision will also hinge on seeing better data than what we have observed lately.”
James Marple, senior economist for TD Economics, said in a news release that the sluggish job numbers were “beginning to look like a trend.
"The combination of negative revisions and underperformance … is evidence that the weakness in the global economy is washing onto American shores. This is more than enough to keep the Fed on the sidelines in October and raises the odds that they will remain there in December.”
