How well is manufacturing (and the economy overall) rebounding in 2022? With the year half over already, it’s the ideal time to take a look at some of the most notable statistics about the current state of the workforce, wages, inflation, and more. Manufacturing seems like it is seeing a boom moment, but will it last?
As we head into the latter half of 2022, the most recent workplace numbers are painting a picture of what the rest of the year might hold. Here’s what you need to know.
Let’s start with the job numbers. According to the US Department of Labor, American employers added 372,000 new jobs in June 2022, while the unemployment remained at 3.6%, the same level it has been for four months in a row. At this point, the US has only approximately 524,000 jobs fewer than it did in February 2020, the last month before COVID-19 led to massive upheavals in the economy. Those jobs are mostly government jobs; the private sector has largely recovered to pre-pandemic employment numbers.
Some sectors are hiring rapidly but are still battling back from major losses during COVID. The leisure and hospitality industries (including food service) added 67,000 jobs in June, but the sector is still 7.8% below its February 2020 numbers, with 1.3 million fewer jobs. Similarly, health care added 57,000 jobs over the course of the month, but is still 176,000 jobs, or 1.1%, below its February 2020 level. Manufacturing lands among the top five sectors for adding new jobs, with 29,000 new jobs added in June and the sector re-achieving its February 2020 level of employment.
The numbers look slightly different when broken down by demographics. The unemployment rate for White workers ticked up just a hair, from 3.2% in May to 3.3% in June. Asian workers saw the largest increase in unemployment, from 2.4% in May to 3.0% in June. The unemployment rate for Hispanic or Latino workers remained steady at 4.3%, and Black workers saw the only notable decrease in unemployment rates, from 6.2% to 5.8%. For workers over the age of 25, those without a high school diploma still have the highest unemployment rate, at 5.8%, and unemployment decreases with each level of education, with workers who have a bachelor’s degree or higher at an unemployment rate of 2.1%.
For individuals, the financial effects are still a little more complex. Average hourly pay rose 0.3% in June, and has risen 5.1% year-over-year. However, consumer prices have risen 8.6% in that same year. This means that the wage increases are not keeping up with inflation, which reduces buying power for households. On the other hand, the Associated Press reports that economic experts may welcome the slower rate of pay increases, as some fear that higher rates of raised pay could further fuel a cycle of ever-increasing prices on consumer products.
Meanwhile, the real gross domestic product (GDP) decreased in the first quarter of 2022, at an annual rate of 1.6%, according to the Bureau of Economic Analysis. This comes on the heels of a 6.9% increase in real GDP in the fourth quarter of 2021. The BEA attributes this GDP drop to “decreases in exports, federal government spending, private inventory investment, and state and local government spending… Imports, which are a subtraction in the calculation of GDP, increased. Nonresidential fixed investment, PCE, and residential fixed investment increased.”
For manufacturing, these numbers mean a potentially strong but still uncertain future ahead. Economists aren’t necessarily interpreting these inflation and GDP numbers as recession signals, but in practice, many consumers may slow down on their non-essential purchases, at least temporarily. Will that be enough to slow down the current manufacturing job boom? Only time will tell, but one thing is for sure: manufacturing is back, and it’s ready to meet any and all challenges that come our way, in 2022 and beyond.
By Rose Dorta
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I’d love to chat with you and answer any questions that you have. Email me, Rose Dorta, managing director of Kaizen HR Solutions, here.