Last Friday's employment report cast a pall over the economic outlook. Headline jobs growth of just 38,000 was much weaker than expected and left us all wondering whether the Federal Reserve would wait longer to raise interest rates. The manufacturing sector shed 10,000 jobs, and has shown job losses in three of the past four months. Year-over-year growth in manufacturing employment has been negative for three months in a row, and it would appear that whatever manufacturing employment renaissance occurred in the years immediately following the Great Recession is over.
But why? Part of the answer came this week in the Job Openings and Labor Turnover Survey, which suggests that manufacturing employment weakness may be a result of a lack of labor supply, not lack of demand. Manufacturing job openings in April jumped to a 15-year high.