The manufacturing sector continued to expand strongly in October, even with some easing in the underlying data, as seen in reports from both the Institute for Supply Management® and the Dallas Federal Reserve Bank. Trade uncertainties and rising prices remain top of mind for business leaders, but the outlook for growth in new orders, production and employment over the next six months remains solid.
Manufacturers added 32,000 workers in October, with 296,000 employees generated in the sector over the past 12 months. That translates into nearly 25,000 workers per month added in the manufacturing sector over the past year—a healthy pace that speaks to the strength in the economy and the overall outlook. In the larger economy, nonfarm payroll employment rose by 250,000 in October, well above the consensus estimate of around 180,000. The unemployment rate remained at 3.7 percent, the lowest since December 1969.
There were also signs that the tight labor market has been increasing wages. In the personal income data, manufacturing wages and salaries totaled $893.4 billion in September, up 4.7 percent over the past 12 months. At the same time, average weekly earnings for nonsupervisory and production workers in manufacturing have increased 3.2 percent year-over-year to $912.73, continuing an upward appreciation in wages in light of the tight labor market.
Consumer confidence jumped to the highest level since September 2000, with the headline index from the Conference Board up from 135.3 in September to 137.9 in October. Americans felt more upbeat about current and future economic conditions, largely on strength in the labor market.
Manufacturers produced $2.33 trillion in value-added output in the second quarter, another all-time high, with the sector accounting for 11.4 percent of real GDP. Adjusted for inflation (in 2012 dollars), real output also set a new record.