Employment Trends in Manufacturing
The manufacturing sector seemed especially at risk of the Federal Reserve’s tightening cycle: Consumers and employers often draw back on big-ticket purchases with higher interest rates, negating the need for manufacturing those big-ticket items. But the manufacturing sector has held up remarkably well, in part because of government intervention. The Inflation Reduction Act and the CHIPS Act, two separate acts that promote clean energy and reshoring manufacturing talent, both boost the manufacturing sector with billions of dollars in direct investment and consumer incentives. It has helped keep the manufacturing sector’s head above water, but even this buoyed sector is beginning to sink.
Recently, manufacturing’s gains have been nearly yawn-inducing. In the past year, the gains were far more robust, but in 2023 (especially in the second quarter), growth has slowed notably. The sector added just 7,000 jobs in June, after losing 3,000 in May. New durable goods orders were up for the past three months, though. Interestingly, the drawback in new jobs for the past couple of months has primarily come from food manufacturing, a subsector that lost 3,300 jobs in June. Other subsectors gained positions, including machinery manufacturing, which gained 3,100 net new jobs and computer and electronic manufacturing, which gained 2,100. Durable goods subsectors are still growing strongly, while food manufacturing and other nondurable industries are suffering.
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