October data: Manufacturing jobs show little sign of slowing, but openings still elevated

REAL ECONOMY BLOG | November 04, 2022

Authored by RSM US LLP

After three months of softening manufacturing payroll data, hiring continued and experienced an uptick in October, according to Bureau of Labor Statistics data released Friday. There were 32,000 net new manufacturing jobs added last month, an increase from the 23,000 added in September.

Bar graph shows net change in manufacturing payrolls year over year from 2020 through October 2022

Another clear signal of labor demand was last week’s release of the quarterly employment cost index which showed continued upward pressure on private wages to the tune of 1.2% quarter over quarter, still elevated from pre-pandemic levels. This is also driven by the fact that wages are not keeping up with inflation and the overall demand for labor.

In September, there were 806,000 open manufacturing jobs, according to Bureau of Labor Statistics data. This is nearly twice the 451,000-job average of the two previous years, before the pandemic.

Bar graph shows the employment cost index, quarter over quarter and seasonally adjusted, from 2018 through much of 2022

Distortions in the labor market from COVID-19 are still present in the data meaning we will continue to have exceedingly tight hiring conditions and wage pressure in the sector. The Federal Reserve will likely continue to hike rates until they see a slowdown in hiring.

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This article was written by Matt Dollard and originally appeared on 2022-11-04.
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