Weak job numbers continue for U.S. manufacturing sector

Manufacturers have “struggled mightily” over the past two years to increase international demand, particularly with a strong U.S. dollar and lingering economic challenges to key markets, according to Chad Moutray, chief economist for the National Association of Manufacturers.

In his recent report, Moutray noted that the U.S. trade deficit, which was $44.3 billion in December, totaled $502.3 billion in 2016 as a whole. That was the highest annual trade deficit since 2012, and it edged slightly higher from the $500.4 billion deficit in 2015.

Specific to the sector, U.S.-manufactured goods exports fell 3.87% in 2016, down from $1.32 trillion in 2015 to $1.27 trillion in 2016, using seasonally adjusted data from TradeStats Express. This extended the 6.19% decline in 2015. Exports were lower in nine of the top 10 markets for U.S.-manufactured goods in 2016, with a small gain in exports to Japan.

Nonetheless, the December trade data seem to indicate a pickup in trade volumes, both for goods exports and goods imports, and we hope that bodes well for improvements in exports in 2017.

Also, manufacturing job openings ticked higher, up from 314,000 in November to 325,000 in December, a three-month high. Postings in the sector have trended lower since achieving an all-time high of 397,000 in April. On the positive side, job openings remain quite elevated overall, especially relative to net hiring. Moutray expects employment growth to accelerate with a turnaround in demand and production.

“For now, however, job growth has continued to be weak. Net hiring (or hiring minus separations) in the manufacturing sector rose from a decrease of 3,000 workers in November to a gain of 9,000 employees in December. In the larger economy, nonfarm job openings changed little, down from 5,505,000 in November to 5,501,000 in December,” he noted in the report.

Manufacturing production rebounded somewhat in December, but over the past 12 months, output was up a rather stagnant 0.2%.