Job Market, Manufacturing Show Signs of Growth

As a colleague said: “a bit of good news at a time when we can all probably use it.”

Those looking for a light at the end of the tunnel have been starved for it most of the summer, but may have found respite in recent U.S. workforce statistics.

Nonfarm payrolls increased by 1.37 million in August and the unemployment rate tumbled to 8.4% as the U.S. economy continued to climb its way out of the pandemic downturn, the Bureau of Labor Statistics reported September 4. The unemployment rate was by far the lowest since the coronavirus shutdown in March. Equally important: an alternative measure that includes discouraged workers and those holding part-time jobs for economic reasons also fell, down to 14.2% from 16.5% in July and 22.8% at the peak in April.

In addition to farm workers, nonfarm payrolls data also excludes some government workers, private households, proprietors, and non-profit employees. Nonfarm payrolls account for around 80% of economic data and the GDP.

To supplement these encouraging figures, U.S. manufacturing technology orders soared to $346.7 million in June, a 56% increase over May 2020, according to the latest U.S. Manufacturing Technology Orders report published by AMT (Association For Manufacturing Technology) August 10. Total orders were down 6% from June 2019. Orders for new machines totaled $1.69 billion through June 2020, 26% lower than the total through the first half of 2019.

“Given the level of uncertainty businesses are facing, the strong June orders are a sign of the underlying health of the manufacturing sector,” said Douglas K. Woods, president of AMT. “While promising in the current climate, June orders were still about 9% lower than the monthly average of 2019. The signals point to the current downturn not being as deep as initially expected; however, the duration of the downturn remains an open question.

“June orders saw growth in several industries over the previous year. Notable increases were in the automotive sector, which almost doubled orders over June 2019. Agricultural equipment manufacturers nearly quadrupled and manufacturers of HVAC and commercial refrigeration equipment more than tripled orders for manufacturing technology.

“It appears that the industries focused on end-use products bucked broader economic trends and increased capacity, while industries farther up the supply chain followed the general tide,” Woods added. “It is only a matter of time before sectors farther up the supply chain will need to increase their capacity as inventories deplete and demand increases for component parts.

“Between conversations with members and other data points, we are expecting this momentum to carry into July even if total orders are slightly below June. We will continue to monitor how quickly demand rebounds, but as Mark Killion of Oxford Economics noted in an address to the AMT membership in late May, a broad recovery across all customer industries may prove to be ‘irritatingly slow.’”

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