Manufacturing Job Losses At Six-Year High, But Forecasts Optimistic

Manufacturers lost 29,000 jobs last month, the largest total since December 2009, when the nation was just beginning to emerge from the Great Recession.

(AP Photo/Paul Sancya)
(AP Photo/Paul Sancya)

The U.S. manufacturing sector saw its highest level of monthly job losses in more than six years in March, but recent indicators suggest that lagging employment could be short-lived.

The latest numbers from the Bureau of Labor Statistics showed the country gaining 215,000 jobs in March as the unemployment rate held steady at 5 percent.

Manufacturers, however, lost 29,000 jobs last month, the largest total since December 2009, when the nation was just beginning to emerge from the Great Recession.

The monthly Institute for Supply Management report also reflected sluggish hiring in the manufacturing sector. The ISM's Employment Index for March, at 48.1 percent, was down 0.4 percentage points compared to February and marked the fourth consecutive month of employment contraction.

But the broader ISM report showed a Purchasing Managers' Index of 51.8 percent, a 2.3 percentage point increase from the previous month and the first rating of more than 50 — a sign of an expanding manufacturing economy — since August.

(AP Photo/Paul Sancya)(AP Photo/Paul Sancya)

Manufacturers endured a largely difficult late 2015 amid a strong dollar and low inventories, but the ISM report showed three consecutive months of growth in both new orders and in production.

The ISM's Bradley Holcomb said that the growth in orders likely represents pent-up demand from previous months and that "people are now going to the store and making their purchases."

Although raw materials inventories remained low, they contracted at a slower pace in March, while exports, long hindered by the dollar, showed their highest rating since late 2014.

Holcomb said that employment levels were high and that a small fluctuation in the Employment Index is "nothing to really write home about and certainly isn’t a concern."

"Now that the PMI has popped up and the comments are very positive, I would expect the employment number to move up as well as we go forward," Holcomb said.

More in Economics