U.S. manufacturing adds jobs in June despite slight slowdown in industry

July 6, 2012

The state of U.S. manufacturing is a topic that is constantly debated by pundits and people within the industry, as numerous indices and reports have shown mixed signals for American industry over the past several months.

The euro zone financial crisis, a slowdown in economic activity in China and a stagnation of emerging markets have all influenced the U.S. manufacturing sector in a negative way, but American companies have withstood much of this turbulence.

Activity has slowed over the past several months, but an adjustment of business strategy and bringing jobs back to the U.S. have helped American manufacturers from collapsing despite a drop in orders.

Though negative data and indices and have been attached to the sector in the past several months, manufacturing actually added jobs during June. The country's unemployment rate stayed at the same level, but more than 11,000 jobs were added by American manufacturers.

This gain of 11,000 was one of the largest increases for any sector during the month, as only 80,000 jobs were added during this period, the Pittsburgh Post-Gazette reported.

A tightening of operations and less capital for expansion led many companies to pull back in hiring, which again showed how manufacturing could be continuing to outpace the rest of the U.S. economy.

"Most firms can achieve their output target with their existing labor force, so they are just not hiring," John  Silvia, the chief economist for Wells Fargo, told The Associated Press.

Though the recent hiring numbers are a positive indication for manufacturing, an industry expert noted that its important for companies in the sector to focus on the larger picture.

Bradley J. Holcomb, the chair of the Institute for Supply Management Manufacturing Business Survey Committee, noted that month-to-month indicators are not as important for the sector as they are for other industries.

"I don’t get excited over one month’s data. We obviously look for trends, and I’ll be just as anxious as anyone else to see what happens next month," said the executive about this month's ISM report. "Whether this month’s uncharacteristically disconcerting report is an anomaly or the start of an actual trend remains to be seen. There’s simply not enough data to make many definitive conclusions."