The number of newly laid-off workers seeking unemployment benefits fell more than expected last week, the second straight drop from a six-year high, according to the Labor Department data released on August 21, 2008.
The Department stated that applications for jobless benefits dropped to 432,000, down by 13,000 from the previous week. It was a bigger improvement than analysts expected. However, the four-week average of claims climbed to 445,750, the highest level in almost seven years.
Unemployment claims have increased in the past several weeks, partly reflecting an outreach effort by the Labor Department to notify people of a 13-week benefit extension approved by Congress in June. That effort, coupled with businesses cutting jobs due to higher energy costs, tighter credit markets and a slowing economy, caused claims to surge for the week of August 2, 2008.
In July 2008, average hourly earnings in manufacturing were $17.78, up 0.3 percent from June’s $17.72 (revised), and up 2.8 percent from $17.30 in July 2007.
In the second quarter of 2008, the average hourly compensation of all manufacturing workers rose 4.6 Percent (from the previous quarter, at an annual rate) reflecting increases in hourly compensation of 5.0 percent in durable goods manufacturing and 3.8 percent in the nondurable goods manufacturing.
For the second quarter of 2008, real hourly compensation, which takes into account of changes in consumer prices, fell 0.6 percent in total manufacturing workers after increasing 1.8 percent in the first quarter; was unchanged in durable goods industries, and declined 1.2 percent in non-durables.
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 total manufacturing sector rose 0.7 percent in 2007 after increasing by 0.8 percent in 2006.
Manufacturing profits in the first quarter of 2008 were $224.3 billion, down 20.0 percent or $56 billion (at an annual rate) from $280.3 billion in the fourth quarter.
Compared with the first quarter profits of 2007, manufacturing profits were down $74.6 billion in the first quarter of 2008. Manufacturing profits in 2007 were up $12.3 billion above manufacturing profits in 2006.
First quarter 2008 profits for all non-financial industries (manufacturing being a subcategory) were down 15 percent from the fourth quarter of 2007 to $827.7 billion, and below 15.9 percent from the first quarter of 2007.
In July 2008, manufacturing employment decreased 35,000 to 13.5 million from June’s (revised) manufacturing employment levels. The decline was registered in both, durable and non-durable sub-sectors.
Among durable goods, job losses were widespread with notable declines in Transportation equipment (-8,300), Wood products (-3,900), Nonmetallic mineral products (-2,100), Furniture and related products (-2,300), Computer and electronic products (-2,500), and Miscellaneous manufacturing (-2,100). Machinery added 6,100 jobs over the month.
For non-durable goods, job losses registered in Food manufacturing (-4,200), Printing and support (3,200), Plastics and rubber products (-2,900), Chemicals (-2,100), and Textile mills (-2,600), among others. Over the past 12 months, manufacturing employment has declined by 383,000.
The manufacturing employs 13.5 million workers and represents 9.8 percent of total non-farm employment.
In July 2008, manufacturing production advanced 0.4 percent after rising by 0.1 percent in June.
The output of durable goods rose 0.6 percent, and gains were widespread. Among durable goods industries, increases were reported in several key sector including Motor vehicles and parts (3.6 percent); Primary metals (0.8 percent); Non-metallic mineral products (0.7 percent), Machinery (0.7 percent); and Aerospace and miscellaneous transportation equipment (1.0 percent). The only durable goods industries to have registered declines in July were Wood products (-1.3 percent); Fabricated metal products (-0.4 percent); and Furniture and related products (-0.8 percent).
The output of nondurable goods rose 0.3 percent. Declines in the indexes for Food, beverage, and tobacco products (-0.1 percent); Textile and product mills (-1.8 percent); Apparel and leather products (-0.5 percent); Paper (-0.9 percent); and Printing and support (-1.4 percent) were more than offset by higher output of Petroleum and coal products (1.9 percent); Chemicals (0.3 percent); and Plastics and rubber products (0.6 percent).
The index for other manufacturing industries (non-NAICS), which consist of Logging and publishing, fell 1.3 percent.
In July 2008, manufacturing industries (NAICS based) operated at 77.6 percent of capacity, 1.9 percentage points below their 1972-2007 average of 79.5 percent and unchanged from their revised capacity utilization in June 2008.
In durable manufacturing, capacity utilization increased 0.4 percentage points in July from June (revised) to 75.8 percent. Capacity utilization advanced in Motor vehicles and parts (2.4 percent); Primary metals (0.6 percent); Nonmetallic mineral products (0.5 percent); Machinery (0.4 percent); Aerospace and miscellaneous transportation equipment (0.7 percent); and Miscellaneous manufacturing (0.3 percent). Capacity utilization decreased in Wood products (-0.8 percent); Fabricated metals products (-0.3 percent) Computer and electronic products (-0.6 percent); and Furniture and related products (-0.6 percent).
Capacity utilization in non-durable manufacturing in July rose 0.2 percentage points from June 2008 (revised) to 80.2 percent. Increased capacity utilization was reported in Petroleum and coal products (1.8 percent); Plastics and rubber products (0.3 percent) and Chemicals (0.2 percent). These gains outweighed losses in Food, beverage and tobacco products (-0.2 percent); Textile and product mills (-1.1 percent); Paper (-0.6 percent); Printing and support (-1.1 percent); and Apparel and leather (-0.2 percent).
Manufacturing productivity decreased 1.4 percent (seasonally adjusted annual rate) in the second quarter of 2008, as output fell 3.5 percent and hours of all workers declined 2.0 percent.
In durable goods industries, productivity fell at a seasonally adjusted annual rate of 3.5 percent in the second quarter of 2008, the largest drop since fourth quarter of 1990, as output and hours decreased by 5.5 percent and 2.1 percent, respectively. In nondurable goods industries, productivity grew 0.7 percent in the second quarter as hours fell faster than output, reflecting decreases of 1.3 percent in output and 2.0 percent in hours.
In total manufacturing, output per hour rose 2.6 percent from the second quarter of 2007 to the second quarter of 2008. For the entire 2000-2007 period, manufacturing productivity grew at a 3.7 percent annual rate.
Strong productivity growth has resulted in the decline in manufacturing employment.
Year to date June 2008, U.S. manufactured goods exports accounted for 61.1 percent of all U.S. exports of goods and services, compared with 63.1 percent a year ago. During that same period, manufactured goods exports were up 14.9 percent above year ago levels, while imports were up 5.3 percent. The trade deficit in manufactures improved to $440.8 billion (annual rate) for 2008, down from $509.1 billion a year earlier.
Shipments of manufactured durable goods in June 2008, up two of the last three months, increased $1.1 billion or 0.5 percent to $212.2 billion. This followed a 1.2 percent May decrease. Transportation equipment, up two of the last three months, had the largest increase in value of $0.7 billion or 1.4 percent to $52.6 billion.
The shipments also increased in Primary metals (2.8 percent), Machinery (2.4 percent) and Fabricated metal products (0.6 percent). However, shipments decreased in Computer and electronic products (-3.9 percent), and Electrical equipment, appliances and components (-0.4 percent).
In July 2008, The Producer Price Index (PPI) for finished goods, except foods and energy, rose 0.7 percent after edging up 0.2 percent in June. The index for finished energy goods jumped 3.1 percent in July following a 6.0 percent rise in the previous month.
The index for gasoline decreased 0.2 percent in July compared with a 9.0 percent surge in June. Conversely, slightly counteracting the deceleration in finished energy goods prices, the index for residential electric power climbed 2.0 percent subsequent to a 0.8 percent gain in June.
The index for finished consumer goods, except foods and energy, edged up 0.6 percent in July, after increasing by 0.3 percent in June. The index for finished consumer foods edged up 0.3 percent in July following a 1.5 percent rise in the prior month.
In July 2008, the ISM index of manufacturing registered 50 percent, a decrease of 0.2 percentage point when compared to June’s seasonally adjusted reading of 50.2 percent. 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 was basically unchanged in July, while the overall economy expanded for the 81st consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The changes in the components of the ISM index in July were: New Orders down 4.6 percent, Production up 1.4 percent, Employment up 8.2 percent, Supplier Deliveries unchanged, and Inventories down 6.2 percent
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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