The Bureau of Labor Statistics reported that there were no new nonfarm payrolls jobs in August, reversing the 85,000 gain from July. The unemployment rate also stayed steady at 9.1 percent. The private sector generated 17,000 net new jobs, which were offset by a loss of 17,000 government workers for the month. Manufacturers lost 3,000 workers in August, the first decline since October 2010 (see graphic). Since December 2009, the manufacturing sector has added 301,000 jobs; this is higher than the figure from last month due to upward revisions to the June and July numbers.

Within manufacturing, durable goods sector industries lost 3,000 employees in August, and nondurable employment was flat. Among the sectors with the strongest growth were machinery (up 3,900), beverage and tobacco products (up 3,100), wood products (up 1,900), paper and paper products (up 1,600) and computer and electronic products (up 1,100). The largest losses, on the other hand, were in the fabricated metal products (down 5,400), food manufacturing (down 5,200), motor vehicle and parts (down 2,800) and furniture and related products (down 2,600).

The average workweek for manufacturers was virtually unchanged from July at 39.8 weekly hours and 3.2 overtime hours. Meanwhile, average weekly earnings were lower for manufacturing workers, down from $958.33 in July to $956.32 in August.  The unemployment rate for manufacturers is currently 8.9 percent, with 9.1 percent within the durable goods sectors and 8.6 percent for nondurables.

In summary, this report is not good news, but it is not inconsistent with other recent indicators. On Wednesday, the ADP report said that manufacturing employment fell by 4,000 workers, which is nearly identical to today’s reading. With much of the policy focus over the coming weeks on job creation – including President Obama’s speech to Congress next Thursday – today’s numbers will embolden those who argue for new initiatives to stimulate economic growth. They will also put more pressure on the Federal Reserve Board, as it plans to meet September 20 and 21 to discuss possible measures, including whether or not to have a third round of quantitative easing.

In short, surveys have suggested for much of the past months that manufacturing and overall business activity in the United States has stalled, and these numbers confirm that view. 

Chad Moutray is chief economist, National Association of Manufacturers.