Economic Report: For Every Two Job Openings, There’s One Unemployed Worker

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 – September 6, 2022

Weekly NAM Economic Toplines:

• The July report recorded 834,000 manufacturing job openings, remaining highly elevated. Over the past 12 months, job openings in the sector have averaged nearly 860,600, continuing to be well above pre-pandemic levels.

• In the larger economy, the July report documented 11,239,000 nonfarm business job openings nationally. At the same time, the July report also recorded 5,670,000 unemployed Americans, which translated into 50.4 unemployed workers for every 100 job openings in the U.S. economy. As such, for every two job openings, there was essentially one unemployed worker in the economy.

• Manufacturing employment increased by 22,000 in August, continuing to rise solidly. The labor market remained a bright spot in an economy that has seen softening in other areas. Through the first eight months of 2022, the sector has hired 297,000 employees, and the manufacturing sector has 12,852,000 employees, the most since November 2008.

• The average hourly earnings of production and nonsupervisory workers in manufacturing rose 0.4% from $25.06 in July to $25.13 in August, up 4.6% from one year ago.

• Meanwhile, nonfarm payroll employment increased by 315,000 in August, continuing to rise steadily. The unemployment rate ticked up from 3.5% in July to 3.7% in August, as the labor force participation rate rose from 62.1% to 62.4%, returning to a pace last seen in March. However, the participation rate remained below pre-pandemic levels, with 63.4% in February 2020.

• Manufacturing activity expanded very modestly, with the ISM® Manufacturing Purchasing Managers’ Index®unchanged at 52.8 in August, remaining the lowest reading since June 2020. Manufacturers remained challenged by supply chains, workforce shortages, soaring costs and economic and geopolitical uncertainties. Yet, the latest ISM® data (and others) suggested that the sector continued to be surprisingly resilient in the face of such notable headwinds.

• Private manufacturing construction spending rose 0.6% to $94.05 billion at the annual rate in July—just shy of May’s pace, which was $94.16 billion. Overall, private construction activity in the sector has trended strongly higher since bottoming out at $72.46 billion in February 2021. Over the past 12 months, activity has jumped 19.2%.

• New orders for manufactured goodsfell 1.0% from a record $554.2 billion in June to $548.5 billion in July, the first decline in factory orders in 10 months. With that said, July’s report also recorded sizable decreases in defense aircraft and parts sales, which can be highly volatile from month to month. In contrast, new orders for core capital goods (or nondefense capital goods excluding aircraft)—a proxy for capital spending in the U.S. economy—rose 0.3% to a record $74.4 billion.

• The long-term trends for manufactured goods orders remained encouraging. New factory orders soared 12.5% year-over-year, or 11.3% with transportation equipment excluded. Core capital goods orders increased a solid 8.4% over the past 12 months.

• Manufacturing activity declined for the fourth straight month in the Dallas Federal Reserve Bank’s district, but with the composite index of general business conditions improving from -22.3 in July to -12.9 in August. Looking ahead, manufacturers in the Texas district remained negative in their assessments of the economic outlook for the next six months. Pricing pressures were predicted to moderate somewhat.

• After falling to a post-pandemic low, consumer confidence rebounded from 95.3 in July to 103.2 in August, according to the Conference Board. Americans were more upbeat in their assessments of the current and future economic environment in August, with consumers continuing to be anxious about inflation, even with some moderation in recent data.

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