The US economy lost 524 thousand jobs in December 2008, Bureau of Labor Statistics (BLS) reported today, marking 2008 the worst year for job losses since 1945. The unemployment rate climbed more than economists forecast, to 7.2 percent in December, the highest level in almost 16 years.
President-elect Barack Obama seized on the report which he said showed the situation in the jobs market was “dire” and “deteriorating” – to urge swift passage of his proposed $800 billion fiscal stimulus by Congress.
In December 2008, average hourly earnings in manufacturing were $17.92, down 0.1 percent from November 2008’s $17.94 (revised), and up 2.9 percent from $17.41 in December 2007.
(BLS/DOL Employment data from “The Employment Situation: December 2008, USDL 09-0004,” released January 9, 2009; next release is February 6, 2009)
http://www.bls.gov/news.release/pdf/empsit.pdf
Manufacturing Wage Rates (Quarterly, Yearly)
The average hourly compensation of all manufacturing workers rose 4.7 percent during the third quarter of 2008 (from the previous quarter, at an annual rate), reflecting increases in hourly compensation of 6.1 percent in durable goods subsector and 2.6 percent gain in nondurable goods manufacturing.
Real hourly compensation for all manufacturing workers declined 1.9 percent in the third quarter of 2008, following declines of 0.5 percent in the first quarter and 2.7 percent in the second quarters of 2008.
In 2007, hourly compensation of all manufacturing workers grew 3.5 percent, compared to a 4.1 percent increase in 2006. Real hourly compensation in the total manufacturing sector rose 0.7 percent in 2007 after increasing by 0.8 percent in 2006.
In the third quarter of 2008, manufacturing profits rose 26.8 percent, or $57.7 billion (at an annual rate), to $272.6 billion from $214.9 billion in the second quarter. Compared with third quarter profits of 2007, manufacturing profits were down $34 billion in the third quarter of 2008. Manufacturing profits in 2007 were $12.3 billion above manufacturing profits in 2006.
Third quarter 2008 profits estimates for all non-financial industries (manufacturing being a subcategory) advanced 9.1 percent from the second quarter of 2008 to $915.6 billion.
In November 2008, manufacturing employment decreased 149,000 to 13.0 million from November’s (revised) manufacturing employment levels, the largest over-the-month decline since August 2001. Factory job losses totaled 791,000 in 2008.
In December, declines were widespread among the component industries. Within durable goods manufacturing, job losses occurred in Fabricated metal products (-28,300), Motor vehicles and parts (-21,400), Machinery (-6,900), Furniture and related products (-9,300), Primary metals (-6,700), Wood products (-11,800), and Computer and electronic products (-8,200), among others.
In the nondurable goods component, the job losses occurred in Plastics and rubber products (-7,400), Food manufacturing (-8,300), Textile mills (-2,900), Printing and related support activities (-6,400), and Paper and paper products (-2,800), among others.
The manufacturing employment of 13.0 million workers represents 9.6 percent of total non-farm employment.
(BLS/DOL Employment data from “The Employment Situation: December 2008, USDL 09-0004,” released January 9, 2009; next release is February 6, 2009)
http://www.bls.gov/news.release/pdf/empsit.pdf
Manufacturing production fell 1.4 percent in November 2008, after increasing by 0.6 percent in October.
The index for durable goods industries decreased 1.3 percent, with declines widespread among its components. The largest drop among major industries was in Primary metals, which fell more than 7 percent for a second straight month, mainly because of lower output at steel mills. Only the index for Aerospace and miscellaneous transportation equipment moved up, but this gain of 12.8 percent reflected the production workers returned to work after the strike at a major commercial aircraft producer.
The production of nondurable goods fell 1.6 percent in November after a gain of 3.5 percent in October. Among nondurables, the largest decline was seen in Chemicals, which fell 3.6 percent. Other industries with declines of at least 2 percent included Textile and product mills (-3.2 percent), Plastics and rubber products (-2.9 percent), and Paper (-2.0).
The index for other manufacturing industries (non-NAICS), which consist of publishing and logging, edged down 0.6 percent in November.
In November 2008, manufacturing industries (NAICS based) operated at 72.2 percent of capacity, 7.3 percentage points below their 1972-2007 average of 79.5 percent and 1.2 percentage points lower than their revised capacity utilization in October 2008.
In durable manufacturing, capacity utilization decreased 1.1 percentage points in November from October (revised) to 68.5 percent. Capacity utilization declined in Nonmetallic mineral products (-2.7 percent); Primary metals (-5.4 percent); Wood products (-1.2 percent); Motor vehicles and parts (-1.7 percent); Electrical equipment, appliances, and components (-1.9 percent); Furniture and related products (-1.9 percent); Machinery (-1.7 percent); Computer and electronic products (-1.5 percent), among others. Capacity utilization increased in Aerospace and miscellaneous transportation equipment (7.8 percent).
Capacity utilization in non-durable manufacturing in November fell 1.3 percentage points from October 2008 (revised) to 76.3 percent. Decreased capacity utilization was registered in Chemical (-2.7 percent); Plastics and rubber products (-2.4 percent); Paper (-1.5 percent); Textile and product mills (-1.9 percent); Printing and support (-0.8 percent).
Manufacturing productivity fell 2.7 percent (seasonally adjusted annual rate) in the third quarter of 2008, as output decreased 7.8 percent and hours of all persons declined 5.3 percent. This is the largest quarterly drop in productivity in the entire series, since the second quarter of 1987. The decline in output was the largest since the first quarter of 1991, when output fell 8.0 percent.
The third-quarter decline in manufacturing productivity was driven by a 10.2 percent decline in nondurable goods productivity, the largest in the series. Nondurable goods output fell by 9.8 percent, while hours in nondurable manufacturing rose 0.4 percent.
In durable goods industries, output per hour grew 2.9 percent in the third quarter of 2008 from the previous quarter, as output and hours decreased by 5.8 percent and 8.4 percent, respectively.
In total manufacturing, productivity increased 0.6 percent from the third quarter of 2007 to the third quarter of 2008.
The trend of strong productivity growth has resulted in the decline in manufacturing employment.
Year to date October 2008, U.S. manufactured goods exports accounted for 61.2 percent of all U.S. exports of goods and services, compared with 62.4 percent a year ago. During that same period, manufactured goods exports were up 13.6 percent above year ago levels, while imports were up 4.7 percent. The trade deficit in manufactures improved to $470.0 billion (annual basis) for 2008, down from $535.4 billion a year ago.
In November 2008, shipments of manufactured durable goods decreased $5.3 billion or 2.6 percent to $195.9 billion, down four consecutive months. This followed a 3.4 percent October decline.
Transportation equipment had the largest decrease, down $1.7 billion or 3.5 percent, to $46.4 billion. Shipments also decreased in Primary metals (-7.6 percent); Computer and electronic products (-4.2 percent); Electrical equipment, appliances and components (-6.5 percent); and Fabricated metal products (-0.2 percent). Shipments increased in Machinery (2.0 percent).
(Census Bureau/DOC data from “Manufacturers’ Shipments, Inventories and Orders (M3-1 (08)-11, CB08-190),” released December 24, 2008; next release is January 29, 2009)
http://www.census.gov/indicator/www/m3/adv/pdf/durgd.pdf
In November 2008, the Producer Price Index (PPI) for finished goods, except foods and energy, edged up 0.1 percent, after increasing by 0.4 percent in October.
The index for finished energy goods fell 11.2 percent in November subsequent to a 12.8 percent decline in October. Prices for residential natural gas decreased 4.6 percent in November after falling 5.9 percent a month earlier. Prices for residential electric power turned up 1.4 percent in November after falling by 0.5 percent in the prior month.
By contrast, the home heating oil index decreased 23.3 percent in November following a 9.6 percent decline in the preceding month. Prices for liquefied petroleum gas and unleaded regular gasoline also fell more than they had in October.
Institute for Supply Management's (ISM) Index updated
In December 2008, the ISM index (PMI) of manufacturing registered 32.4 percent, 3.8 percentage points lower than the 36.2 percent reported in November.
When comparing December to November, the PMI indicates a continuing rapid rate of contraction in manufacturing. An index above 50 percent indicates that the manufacturing economy is generally expanding; an index below 50 percent indicates that it is generally contracting.
Economic activity in the manufacturing sector failed to grow in December for the fifth consecutive month, and the overall economy contracted for the third consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
“Manufacturing activity continued to decline at a rapid rate during the month of December. The decline covers the full breadth of manufacturing industries, as none of the industries in the sector report growth at this time. New orders have contracted for 13 consecutive months, and are at the lowest level on record going back to January 1948,” says Norbert J. Ore, C.P.M., chair of the manufacturing business survey committee.
The changes in the components of the PMI in December were: New Orders down 5.2 percent, Production down 6.0 percent, Employment down 4.3 percent, Supplier Deliveries down 3.5 percent, and Inventories down 0.3 percent.
U.S. Industries Reporting Growth in December 2008
None of the industries in the sector reported growth in December 2008.
Prepared by
Office of Competition and Economic Analysis
Manufacturing and Services
International Trade Administration
U.S. Department of Commerce
(202) 482-3699
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