The US manufacturing job market hasn't been this strong in over 20 years
- The July jobs report, released Friday, fell short of topline expectations.
- But it showed that the manufacturing sector added 37,000 jobs and has added 327,000 jobs over the past 12 months.
- The 327,000 jobs added over the past 12 months is the highest 12-month total since April 1995.
President Donald Trump said during the 2016 campaign that he would “restore manufacturing in the United States.” The most recent jobs report gives him something to point to on that promise.
While Friday’s July jobs report disappointed overall on its topline numbers, the release showed that the manufacturing sector added another 37,000 jobs, the highest number since December.
The latest addition also capped the strongest 12-month period for manufacturing jobs growth since 1995. Over the past year, the US has added 327,000 manufacturing jobs, the highest 12-month total for manufacturing job growth since April 1995, when the number was 345,000.
It’s unclear exactly the reasons for the job boom in manufacturing, but the National Association of Manufacturers appeared to give Trump’s agenda some credit in a statement released Friday.
“With 157,000 jobs created in July, including 37,000 in manufacturing, this report shows tax reform and regulatory relief are continuing to deliver for America’s manufacturing workers,” said Carolyn Lee, executive director of the National Association of Manufacturers’ Manufacturing Institute.
There has been some fear that Trump’s trade fights with various countries could weigh on job growth in the sector, but so far manufacturing appears to be showing resilience.
While growth has been strong, the overall number of manufacturing employees still remains well below the sector’s peak in the late 1970s. And productivity growth, or the amount of output a worker can produce in an hour, remains historically sluggish. Increased productivity is the major contributor to wage growth and increased standards of living.
Real output for US manufacturing remains slightly below its pre-financial crisis high, and growth of the Federal Reserve’s industrial production index remains roughly around its post-crisis average.
Earnings growth in the sector also trailed the overall economy, with average hourly earnings only picking up 1.3% year-over-year compared to 2.7% year-over-year growth for the entire labor market. And the average hourly wage of $27.01 slipped slightly below the average for overall private earnings, which ticked up to $27.05.
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