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Reports: Manufacturing already in recession

Amid speculation of an impending economic recession comes conjecture that the manufacturing sector already is in recession, based on certain metrics.

Factory activity in August reached its lowest Purchasing Managers Index (PMI) in nearly a decade, according to a monthly report from IHS Markit, hindered by a number of factors, including a significant decline in exports. The seasonally adjusted PMI for August fell to 50.3, marking the least discernible improvement in the health of the U.S. manufacturing sector since the “depths of the financial crisis” in 2009, the report shows.

The rate of production growth was among the lowest reported in the last three years. Lackluster client demand led a number of firms to curb output, IHS reported. The upturn in new business also slowed in August and was among the weakest seen in the last decade.

New export orders fell at the quickest pace since August 2009, linked by many firms to trade wars and tariffs, the report shows. Firms remained hesitant towards hiring in August, with employment levels broadly unchanged during the month. However, IHS Markit reported that some firms said the small change in workforce numbers was in part due to a lack of suitable candidates.

“The August PMI indicates that U.S. manufacturers are enduring a torrid summer, with the main survey gauge down to its lowest since the depths of the financial crisis in 2009,” said IHS Markit Chief Business Economist Chris Williamson. “Output and order book indices are both among the lowest seen for a decade, indicating that manufacturing is likely to have again acted as a significant drag on the economy in the third quarter, dampening GDP growth.”

At current levels, Williamson said, manufacturing production is falling at a rate of 3 percent annually.

Separately, the Institute for Supply Management’s purchasing managers index fell to 49.1 in August. The new orders index dropped to its lowest point in more than seven years.

From Glassdoor, following Friday’s Bureau of Labor Statistics jobs report: “Manufacturing continues to stagnate, adding only 3,000 jobs in August. The contraction in manufacturing reported by ISM earlier this week and a 15.9 percent drop in manufacturing job openings on Glassdoor haven’t yet translated into job losses. Over the next few months, we expect more insight into how the latest round of tariffs are affecting the industry.”

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Rochester economy continued to climb in July

black-and-white-contemporary-daylight-921025-up-stairsRochester’s economy continued its growth spurt in July, with a drop in the jobless rate and soaring private sector job gains.

The Rochester region ranked near the top among the 15 metro areas statewide for its percentage growth in jobs last month. The region—which includes Livingston, Monroe, Ontario, Orleans, Wayne and Yates counties—gained 9,800 nonfarm jobs, or 1.9 percent, while the private sector added 9,400 jobs, or 2.1 percent, not seasonally adjusted.

Nonfarm jobs include private sector and government jobs.

Rochester’s unemployment rate fell to 4.3 percent in July from 5.1 percent a year ago, not seasonally adjusted, the state Department of Labor reported this week.

Seasonally adjusted data reflects seasonal influences such as holiday and summer hires. Data of this type is most useful when comparing month-to-month, while non-seasonally adjusted data is most valid in comparisons of year-to-year data.

The Labor Department uses two different data sets to determine unemployment rates and job counts; the state’s private-sector job count is based on a payroll survey of 18,000 New York employees, while the federal government calculates the state’s jobless rates based in part on the results of the current population survey of 3,100 households statewide. The two data sets may result in a region showing job losses while also having an improved unemployment rate.

From July 2017 to July 2018, the state’s private sector job count rose by 7,900, or 0.1 percent, to 8.19 million, an all-time employment high. The seasonally adjusted unemployment rate statewide fell from 4.5 percent last year to 4.3 percent last month, matching the state’s lowest level since March 2007.

Job gains statewide continued to primarily be in educational & health services, while the manufacturing sector lost 4,800 jobs from July 2017 to July 2018, the Department of Labor reported.

Nationwide, some 157,000 jobs were added in July, according to the Bureau of Labor Statistics. The unemployment rate edged down to 3.9 percent. The employment-to-population ratio rose to a new, post-recession high of 60.5 percent.

Glassdoor Economic Research, which had predicted July’s job growth to be 188,000, has forecasted job gains of about 154,000 jobs per month through next June, although the firm cautions that the forecasts are at the whim of other external factors.

Despite the good news, the Center for Economic and Policy Research reports that there is little evidence of accelerating wage growth. In the last year, the average hourly wage has risen by 2.7 percent.

CEPR reports that the number of involuntary part-time workers fell by 176,000 in July, while the percentage of unemployment due to voluntary quits rose to 13.5 percent. The jobless rate for Hispanic workers nationwide fell to 4.5 percent, a new record low.

CEPR also reported that blue collar employment grew by 0.3 percent in July as the nation added 52,000 jobs in construction, manufacturing and mining and logging. Over the last three months, blue collar jobs added an average of 53,000 jobs per month.

Challenger, Gray & Christmas Inc., an outplacement company that tracks job gains and losses, reported that year-over-year teen hiring rose 62 percent in July. Some 307,000 workers aged 16 to 19 found jobs in July, bringing the summer’s total to 1.39 million teen job gains.

“Some retailers announced they were beginning to hire for the holiday season early, a boon to teen workers who want employment,” said Challenger, Gray & Christmas Vice President Andrew Challenger. “While the participation rate among teenagers has averaged under 40 percent per year since the recession years, teens can certainly benefit from the tight labor market, especially as employers struggle to fill positions.”

Challenger, Gray & Christmas’ July Job Cuts also showed marked improvement. The pace of downsizing nationwide fell to the lowest level of the year, as U.S.-based employers announced plans to cut 27,122 workers from payrolls during the month.

“The economy is at near-full employment,” said CEO John Challenger. “Nearly 90 percent of companies recently polled by Challenger are either actively hiring or in retention mode. Companies are not letting go of their workforces right now.”

Despite holiday hiring, retailers continue to lead the pack when it comes to job cuts. Nearly 76,000 layoffs were announced in the retail sector in July.

“Retail cuts have been inching up the last four years, as online shopping causes disruptions to business as usual,” Challenger’s CEO said. “We’re starting to see layoffs in this sector that rival recession years.”

Nationwide, more than 272,000 layoffs have been announced this year, with more than 16,000 in New York State. In July, nearly 2,000 job cuts were announced statewide.

Locally, the economy has improved significantly the last couple of months. Each county in the Rochester metro area saw significant declines in unemployment rates in July:
• Genesee County—down to 3.7 percent from 4.3 percent in July 2017;
• Livingston County—4.1 percent, compared with 4.9 percent in July 2017;
• Monroe County—4.4 percent, down from 5.2 percent a year ago;
• Ontario County—3.5 percent, compared with 4.1 percent a year ago;
• Orleans County—4.9 percent, compared with 6 percent in July 2017;
• Wayne County—3.8 percent, down from 4.7 percent a year ago; and
• Yates County—3.3 percent, down from 4.1 percent in July 2017.

The Syracuse area jobless rate last month fell to 4.3 percent from 5.1 percent the previous year, while in Buffalo the unemployment rate was 4.5 percent, compared with 5.4 percent in July 2017. Both areas experienced a growth in nonfarm and private sector jobs last month.

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Rochester economy improves in June

jobs happy accomplishment-agreement-business-1249158The Rochester metro area continued to thrive economically in June as job growth improved and unemployment dipped.

Rochester’s jobless rate dropped to 4.3 percent in June, mirroring a statewide trend, the state Department of Labor reported. The area added 8,800, or 1.6 percent, nonfarm jobs, while the private sector job count increased by 8,100, or 1.8 percent, not seasonally adjusted. Nonfarm employment includes private sector and government jobs.

Binghamton, Elmira and Utica-Rome were the only regions statewide to lose jobs in June.

Seasonally adjusted data reflects seasonal influences such as holiday and summer hires. Data of this type is most useful when comparing month-to-month, while non-seasonally adjusted data is most valid in comparisons of year-to-year data.

The Labor Department uses two different data sets to determine unemployment rates and job counts; the state’s private-sector job count is based on a payroll survey of 18,000 New York employees, while the federal government calculates the state’s jobless rates based in part on the results of the current population survey of 3,100 households statewide. The two data sets may result in a region showing job losses while also having a reduced unemployment rate.

From June 2017 to June 2018, the state’s private sector gained 132,400 jobs. The number of private sector jobs in New York in June was 8.19 million. The state’s seasonally adjusted unemployment rate remained unchanged in June at 4.5 percent, matching the state’s lowest level since May 2007.

“In June 2018, New York’s labor market continued to grow as the state added 15,000 private sector jobs to reach a new, all-time high employment count,” said Bohdan Wynnyk, director of the state Department of Labor’s Division of Research and Statistics. “In addition, the statewide unemployment rate remained at its lowest level since before the recession.”

Job gains statewide in June were highest in the educational & health services sector, while manufacturing lost 3,400 jobs, the Labor Department reported.

The Bureau of Labor Statistics reported a total nonfarm job increase of 213,000 in June and an unemployment rate of 4 percent. The jobless rates among teenagers (12.6 percent) and African-Americans (6.5 percent) were the highest among the major work groups, BLS reported.

The Center for Economic and Policy Research noted that in spite of strong job gains and employer complaints about worker shortages, wage growth does not appear to be accelerating. The average hourly wage nationwide has increased by 2.7 percent in the last year, and that appears to be slowing.

CEPR also noted that the share of workers nationwide with multiple jobs remained stable over the last year at 4.8 percent. The overall picture is one of a strengthening labor market, but one that is still not tight enough to produce substantial wage growth, CEPR’s Senior Economist Dean Baker concluded.

CEPR’s monthly Blue Collar Jobs Tracker shows that employment in the states formerly known as the industrial belt, which includes New York, continues to trail the national trend. Compared with last year, blue collar employment in the nine-state region was up by 2.1 percent, or 122,900 jobs, compared with a 3.1 percent increase nationwide.

June’s nationwide jobs report marks the economy’s 93rd consecutive month of positive job gains, the longest streak on record, Glassdoor Economic Research noted. That historic wave of job creation has fueled a nine-year economic expansion, the second longest in U.S. history since the 1850s, the organization said.

Among the 84 job titles Glassdoor tracks each month, bank tellers show the fastest growth in median base pay for full-time workers from one year ago in June. Truck drivers and warehouse associates rounded out the top three.

Challenger, Gray & Christmas Inc. in its June Job Cuts report said job cuts announced by U.S.-based employers rose 18 percent, from 31,517 in May to 37,202 in June, and June’s job cuts were up 19.6 percent from a year ago.

“In a tight labor market it’s no surprise employers are hanging on to their current workforces, as four months of this year have seen job cut totals under 40,000,” said CEO John Challenger. “However, in the wake of announced tariffs, we may be entering a period of increased cuts going forward.”

In New York State, employers announced 3,129 job cuts in June, for a total of 14,348 in the first half of the year.

The state Department of Labor reported the following June unemployment rates in the Rochester area:

• Monroe County—4.3 percent, down from 5 percent a year ago;
• Genesee County—3.9 percent, compared with 4.3 percent in June 2017;
• Livingston County—4.3 percent, down from 5 percent in June 2017;
• Ontario County—3.9 percent, compared with 4.3 percent a year ago;
• Orleans County—4.8 percent, down from 5.7 percent a year ago;
• Wayne County—4.1 percent, compared with 4.7 percent in June 2017; and
• Yates County—3.6 percent, down from 4.2 percent a year ago.

The Buffalo area jobless rate in June was 4.5 percent, down from 5.2 percent in June 2017, while Syracuse’s unemployment rate fell to 4.4 percent from 5 percent a year ago.

[email protected] / 585-653-4021

Follow Velvet Spicer on Twitter: @Velvet_Spicer

Jobs situation improves in May here

architecture-buildings-business-were-open-331990The Rochester-area economy improved significantly in May with a steep drop in the unemployment rate and the third largest increase statewide in the number of private sector jobs, the state Department of Labor reported this week.

Rochester’s jobless rate last month dropped to 4 percent from 4.7 percent a year ago, not seasonally adjusted. The Rochester metro area also added 10,700 nonfarm jobs, or 2 percent, while the private sector added 10,000 jobs, or 2.2 percent, compared with May 2017. Nonfarm employment includes private sector and government jobs.

Binghamton, Elmira, Utica-Rome and Watertown-Fort Drum were the only metro areas statewide to lose jobs in May, the Labor Department reported.

Seasonally adjusted data reflect seasonal influences such as holiday and summer hires. Data of this type is most useful when comparing month-to-month, while non-seasonally adjusted data is most valid in comparisons of year-to-year data.

The Labor Department uses two different data sets to determine unemployment rates and job counts; the state’s private-sector job count is based on a payroll survey of 18,000 New York employees, while the federal government calculates the state’s jobless rates based in part on the results of the current population survey of 3,100 households statewide. The two data sets may result in a region showing job losses while also having a reduced unemployment rate.

From May 2017 to May 2018, the state added 110,500 nonfarm jobs and 109,600 private sector jobs. New York’s private sector job count rose by 13,500 from April to May, reaching a new employment high of 8.17 million.

The state’s unemployment rate decreased from 4.7 percent in May 2017 to 4.5 percent last month, its lowest in more than a decade. Preliminary data for the nation shows a jobless rate of 3.8 percent, down from 4.3 percent a year ago.

Job gains nationwide in May were spread across a number of sectors including construction, retail and health care. Manufacturing added 18,000 jobs in May, its weakest month since September 2017.

Those benefiting from the low nationwide unemployment rate likely have been disadvantaged minorities and less-educated workers, the Center for Economic and Policy Research noted in its monthly Jobs Byte, an in-depth analysis of the employment data released by the Bureau of Labor Statistics.

CEPR also reported that the jobless rate for African Americans in May fell to 5.9 percent, an all-time low. The number of involuntary part-time workers also dipped last month, while the share of unemployment due to voluntary quits hit a new high of 13.8 percent.

Glassdoor Economic Research noted that average hourly wages rose 2.7 percent in May, and the organization is beginning to see rising wage pressures in its Local Pay Reports.

“Today’s strong labor market is putting many job seekers in the driver’s seat, and that’s starting to translate into pay gains,” said Glassdoor’s Chief Economist Andrew Chamberlain in a post. “As of May, the economy has steadily added jobs to payrolls for 92 consecutive months, the longest streak since the federal government started collecting payroll data in the 1930s.”

Challenger, Gray & Christmas Inc. in its monthly job cuts report said job cuts announced by U.S.-based employers fell 12.6 percent last month, from 36,081 in April to 31,517 in May. The global outplacement and executive coaching firm reported that job cuts were down 4.8 percent from 33,092 in May 2017.

One caveat, though, is that job cuts typically decline in May and June as employers tend to make their staffing moves at the beginning of the year or in the fourth quarter, said John Challenger, the firm’s CEO. In fact, so far this year, employers have announced 207,977 job cuts nationwide, a 6.2 percent increase from the 195,895 announced in the first five months of 2017.

In New York last month, employers announced 1,404 job cuts, for a total of 11,219 year-to-date.

The state Department of Labor this week reported the following local unemployment rates:
• Genesee County—3.8 percent, down from 4.4 percent in May 2017;
• Livingston County—4.2 percent, compared with 4.7 percent in May 2017;
• Monroe County—4.1 percent, down from 4.7 percent a year ago;
• Ontario County—3.6 percent, compared with 4.1 percent a year ago;
• Orleans County—4.4 percent, down from 5.4 percent in May 2017;
• Wayne County—3.8 percent, down from 4.7 percent a year ago; and
• Yates County—3.4 percent, compared with 3.9 percent in May 2017.

Buffalo’s unemployment rate fell to 4.3 percent last month from 5 percent in May 2017, while the Syracuse area jobless rate was 4.1 percent, down from 4.8 percent a year ago.

[email protected] / 585-653-4021
Follow Velvet Spicer on Twitter: @Velvet_Spicer