Job Growth Sluggish in May, Highlighting Need for Certainty
The U.S. economy created just 75,000 new jobs in May, with a sluggish 3,000 manufacturing jobs created for the month.
U.S. manufacturers have experienced record growth over the past couple years, but certainty on a wide portfolio of issues, from infrastructure to trade, will be critical to keep that growth sustained throughout 2019. For policymakers in Washington, the May jobs reported should make that clear.
According to the latest Bureau of Labor Statistics jobs data, the U.S. economy created just 75,000 new jobs in May, with a sluggish 3,000 manufacturing jobs created for the month.
“Manufacturing employment has been more sluggish than desired for four straight months, coinciding with weaker demand and production activity and lagging behind the robust pace we experienced last year,” NAM Chief Economist Chad Moutray said. “Indeed, manufacturers created 264,000 net new jobs in 2018, the best pace of employment growth in the sector since 1997. Yet, the sector has added only 13,000 employees since February. For those numbers to pick back up, our leaders in Washington must recommit to tackling the issues currently creating uncertainty for businesses and focus on policies aimed at sustaining the vigorous growth the industry saw last year.”
Employment has not been the only indicator that’s lagged behind. Earlier this week, the Institute for Supply Management® said manufacturing activity in May expanded at its slowest pace since October 2016; whereas the competing survey from IHS Markit reflected growth that was the weakest pace in nearly a decade. In addition, manufacturing production has fallen in three of the past four months.
“Manufacturers need certainty,” Moutray said. “Things like ratifying the USMCA, securing a bilateral trade agreement with China, passing a long-term reauthorization of the Ex-Im Bank and enacting a bipartisan agreement to update our nation’s infrastructure are immediate steps policymakers can take that would greatly benefit the industry long into the future.”
Another factor holding back manufacturing growth is the looming workforce crisis—a challenge which continues to be the top concern for business leaders, especially in a tight labor market. The number of job openings in the sector has remained highly elevated, averaging about a half million per month over the past 12 months.
“At the end of the day, despite lower levels of industry growth, manufacturers are still creating far more open jobs than workers ready to fill them,” Moutray said. “That’s putting a damper on job creation as well.” Overall, the labor market remains tight, with the unemployment rate remaining 3.6 percent, the lowest since December 1969.
The Manufacturing Institute, the NAM’s education and workforce partner, is the leading industry authority on workforce development and recognizes the need to grow the qualified manufacturing workforce and close the skills gap. It has a range of programs and initiatives designed to do just that.
“The future of this industry and our economy at large are both tied to the future of the manufacturing workforce,” said Carolyn Lee, Manufacturing Institute executive director. “It’s just one more reason why we at the Institute work so hard every day to support the manufacturing workforce of today and grow the manufacturing workforce of tomorrow.”