Monday Economic Report: The Great Resignation - Labor Market Quits Hit Record High

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 – January 10, 2022

NAM Weekly Economic Toplines: 

• There were 858,000 manufacturing job openings in November, down from a record 955,000 in October. While the pace of job postings decelerated somewhat, it was the eighth straight month with openings that have exceeded 800,000, averaging 887,000 over that time frame.

• Nonfarm business job openings eased from 11,091,000 in October, which was the second highest on record, to 10,562,000 in November. There were 6,877,000 unemployed Americans in November, translating into 65 unemployed workers for every 100 job openings in the U.S. economy.

• Total nonfarm business quits jumped to 4,527,000 in November, a new all-time high. This speaks to the high degree of “churn” in the labor market, and it exacerbates the workforce difficulties that companies are experiencing.

• Turning to the latest jobs numbers, manufacturing employment rose by 26,000 in December, increasing for the eighth straight month with solid growth. There were 349,000 workers added in the sector in 2021, the most since 1994, but there remained 219,000 fewer manufacturing employees in December relative to pre-pandemic levels.

• Average hourly earnings of production and nonsupervisory workers in manufacturing increased 0.5% to $24.33 in December. That represented a 5.2% increase over the past 12 months, the fastest year-over-year rate of wage growth in the sector since September 1982.  

• Meanwhile, nonfarm payroll employment increased by just 199,000 in December, down from 249,000 in November and the slowest monthly gain in 12 months. Nonetheless, the unemployment rate dropped to 3.9% in December, a post-pandemic low.

• The ISM^® Manufacturing Purchasing Managers’ Index^®declined from 61.1 in November to 58.7 in December, expanding at the slowest pace since last January. Even with some easing, new orders and production ended the year with solid growth, and hiring rose at the fastest rate since April. Measures of delivery times and cost pressures continued to reflect a challenging environment but have pulled back from recent records.

• New orders for manufactured goods rose 1.6% to a new record level in November. Overall, the manufacturing sector continues to expand strongly—despite lingering supply chain, workforce and pricing pressures—with new orders soaring 13.6% year to date.

• Private manufacturing construction spending rose 0.9% to the strongest pace since October 2015 and increasing for the fifth straight month. Encouragingly, private construction activity in the sector has trended higher since bottoming out at $65.92 billion in December 2020.

• The U.S. trade deficitjumped to $80.17 billion in November, which was just shy of the all-time high of $81.44 billion recorded in September. The goods trade deficit soared to a record $98.99 billion in November, with goods imports also hitting new heights. At the same time, U.S.-manufactured goods exports totaled $1,033.11 billion through the first 11 months of 2021, soaring 18.94% from $868.54 billion year to date in 2020.

• The minutesfrom the Dec. 14–15 Federal Open Market Committee meeting suggest a willingness among many participants to speed up a possible interest rate hike in light of inflationary pressures, perhaps as soon as the March 15–16, 2022, meeting. That is earlier than many market participants had expected. (I had previously written that I expected the tapering of asset purchases to end in March, with a rate hike as soon as the May 3–4 meeting.)

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