The Bureau of Labor Statistics reported that overall nonfarm payrolls increased by 117,000 in July, which was better than expected, and the unemployment rate dropped to 9.1 percent. Private sector jobs were up 154,000, with manufacturers hiring an additional 24,000 workers.

In addition, data for May and June were revised, and the manufacturing sector added 7,000 and 11,000 jobs, respectively, in those two months.  Since December 2009, manufacturers have created 289,000 new jobs, or over 15 percent of the total change in nonfarm employment over that time frame.

Within manufacturing, durable goods accounted for 23,000 of the net new employment, led by a healthy increase in workers at motor vehicle assembly plants (up 12,000). This is a sign that the automotive sector is beginning to recover from the supply disruptions of the spring. Fabricated metal products (up 4,500), furniture and related products (up 2,800), computer and electronic products (up 2,500), plastics and rubber products (up 2,100) and food manufacturers (up 1,700) also saw gains.

The average workweek for manufacturers was unchanged between June and July at 40.3 weekly hours and 3.1 overtime hours. Meanwhile, average hourly earnings ticked higher for manufacturing workers, up from $23.68 per hour in June to $23.79 in July.  The unemployment rate for manufacturers is currently 9.2 percent, unchanged from the previous month, with 9.6 percent within the durable goods sectors and 8.5 percent for nondurables.

In short, these numbers are an improvement. After a couple weaker months of job growth, manufacturing employment is once again moving in the right direction, led by the durable goods sector. It is important to note the bounce-back in employment within the automotive sector, which has been challenged since the Japanese earthquake and tsunami with supply chain issues. Hopefully, this bodes well for future growth in that sector.

However, manufacturers are still facing significant headwinds in the economy, as we saw yesterday with falling equity prices worldwide. To the extent that global economic problems – particularly in Europe – spread, this could have a major impact on confidence and growth in the coming months, limiting employment growth. Regulatory uncertainty is continuing to impact growth for manufacturers.

In addition, while a U.S. debt deal was enacted this week, much of the focus this fall will be on deficit reduction. As these numbers show, the public sector will continue to be a drag on both economic and job growth moving forward, but to the extent that we can get our fiscal house in order, the positives might outweigh the negatives.

Chad Moutray is chief economist, National Association of Manufactures.