U.S. manufacturing bolstered by strong job growth

August 6, 2012

Though the overall reports for the U.S. economy and the manufacturing sector as a whole were not as positive as experts were predicting, there was an unexpected nugget of positive news for the industry that came in the announcement from the Labor Department.

Forbes reported that the U.S. economy added 172,000 private-sector jobs during July, marking a significant rise from month-to-month and beating the expectations of many economists surveyed by Briefing.com.

Among these jobs were more than 25,000 positions that were added by U.S. manufacturers, a much needed jolt for the sector and a sharp increase from the 11,000 new roles that were created in the previous month.

The specific sectors within manufacturing that added the most positions were transportation equipment and metal fabrication, as technical jobs were added by a number of firms across the country.

According to the news outlet, the sector has also reached a new level of total employment, as U.S. manufacturers currently account for 11.9 million jobs, marking the highest point for the industry since April 2009.

The state of the overall economy is also important to the sector, as the demand from consumers and amount of money people have influences the production levels for manufacturers. Adjustments to business strategy can result from these readings and companies may either increase or scale back output.

The Associated Press reported that the unemployment rate went up, but this data is heavily reliant on the number of people looking for a job, which economists have noted went up in the past month.

"After a string of disappointing economic reports…we'll certainly take it," James Marple, senior economist at TD Economics, told the news outlet.

This sentiment was mirrored by many economists, as the job gains in July far outweighed the increase in unemployment for the industry experts.

"It also isn't strong enough to drive the unemployment rate lower, which is what the Fed really wants to see. So, on balance, we doubt this would be enough to persuade the Fed to hold fire in September," Paul Ashworth, senior U.S. economist for Capital Economics, told the AP.

Further gains in employment could only help the U.S. manufacturing sector, as the domestic demand is helping to offset the economic troubles presented by the EU fiscal crisis.