Manufacturers Scaled Back Hiring in June
Reflecting general weaknesses in the economy in June, the level of job hirings and separations declined somewhat from May, according to new data from the Bureau of Labor Statistics. While the rates of each to total employment did not change much, there were 78,000 fewer hires and 129,000 less separations in June than in May.
This reduction in employment activity was broad-based in almost every major sector except for leisure and hospitality, which experienced additional hiring and separations in the accommodation and food services sector.
For manufacturing, hiring fell from 263,000 new workers in May to 246,000 in June. At the same time, total separations for manufacturers dropped from 272,000 in May to 250,000 in June. These declines occurred in both durable and nondurable goods sectors, with greater reductions in the latter.
The bottom line is that separations in manufacturing have exceeded hiring for the second month in a row. This time that difference is 5,000 workers, which is a marginal improvement from the 9,000 worker gap in May.
Meanwhile, job openings in manufacturing remained flat, with 211,000 new job postings in both May and June. This represents 1.8 percent of the total workforce in the sector for both months. Breaking this down using seasonally unadjusted data, however, the results are more mixed. There was an increase in job openings within durable goods industries (up from 151,000 in May to 164,000 in June); whereas, there were fewer postings for nondurables (down from 70,000 to 56,000).
These data confirm the weaknesses in the larger macro economy in June, which we already knew from employment and other data released in the past month. From the bigger picture, the Job Openings and Labor Turnover Survey (JOLTS) data continue to show the stagnant pace of growth for new job creation. While the pace of separations have slowed considerably (even with the more recent weaknesses), hires have remained more-or-less in the same range for much of the past couple years. This is a challenge for policymakers, as they seek strategies that promote economic growth moving forward.
Chad Moutray is chief economist, National Association of Manufacturers.