Monday Economic Report: Mixed Employment News in November Despite Solid Manufacturing Gains

AICC, through its membership in the Council of Manufacturing Associations, is pleased to present the "Monday Economic Report" from the NATIONAL ASSOCIATION OF MANUFACTURERS (NAM).

By Chad Moutray, Ph.D., CBE – December 6, 2021 

NAM Weekly Economic Toplines: 

• Manufacturing employment rose by 31,000 in November, and year to date, hiring in the sector is on track for the best annual job growth since 1994, rising by 315,000 in the first 11 months. Yet, there remained 253,000 fewer manufacturing employees relative to pre-pandemic levels, with 12,799,000 workers in the sector in February 2020.

• The average hourly earnings of production and nonsupervisory workers in manufacturing rose 0.4% from $24.14 in October to $24.24 in November, with a 4.9% increase over the past year.

• Nonfarm payroll employment increased by 210,000 in November, which was well below the consensus estimate of around 575,000. That figure comes from the “Establishment Survey” from the Bureau of Labor Statistics. The separate “Household Survey” shows employment growth of 1,136,000 for the month, and that stronger figure more accurately depicts the current strength in the labor market.

• Along those lines, the unemployment rate dropped from 4.6% in October to 4.2% in November, a post-pandemic low.

• Despite ongoing challenges, production strengthened in November at the fastest pace since April, buoying the ISM® Manufacturing Purchasing Managers’ Index®. The headline index edged up from 60.8 in October to 61.1 in November. Hiring growth was also the strongest since April. The sample comments and the data once again highlighted supply chain disruptions, shortages of key inputs and soaring costs.

• In the November manufacturing survey from the Dallas Federal Reserve Bank, activity accelerated in most of the key measures. The index for raw material costs rose to another all-time high. Respondents remained positive in their outlook for the next six months, and they expected wages and benefits to jump at the fastest pace in the survey’s history.

• New orders for manufactured goods rose 1.0% to a record $522.1 billion in October, increasing for the sixth straight month. Excluding transportation equipment, manufacturing orders increased 1.6% in October. Factory shipments increased 2.0% in October, or 10.1% year to date.

• Overall, the manufacturing sector continues to expand strongly—despite lingering supply chain, workforce and pricing pressures—with new orders soaring 11.5% year to date. In addition, new orders for core capital goods rose 0.7% to $78.7 billion in October, a record high, with 9.9% growth year to date.

• Private manufacturing construction spending edged up 0.3% to $78.90 billion in October, the strongest pace since November 2019. Encouragingly, private construction activity in the sector has trended higher since bottoming out at $65.92 billion in December 2020, with 13.2% growth year-over-year from $69.71 billion in October 2020.

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