Manufacturing and Construction Employment Slows in May

Manufacturing job creation, in particular, showed softening. The sector’s job growth was at its lowest level in two and a half years, with just 3,000 factory jobs added compared to 5,000 in April. Trade tensions were blamed for stifling investment and employment.

“There’s increasing evidence that the ongoing trade war here is beginning to have some tangible effects on the U.S. economy,” said Tim Quinlan, a senior economist at Wells Fargo Securities. “We’re not on the edge of the cliff here. But the pace of expansion in [manufacturing] is the slowest of the Trump era.”

The Alliance for American Manufacturing said the latest jobs report demonstrates that the economy is slowing and urged action on an infrastructure bill.

“Manufacturing job growth is clearly slowing,” said AAM President Scott Paul. “Economic expansions don’t last forever, but there are policy interventions that can boost demand and support new factory job creation. Now would be a good time to get a $2 trillion infrastructure plan back on track, and to secure a meaningful trade deal with China to rebalance that relationship.”

The construction sector added just 4,000 jobs in May after surging by 30,000 in April for the beginning of the construction season. Employment in the sector is up 3.0 percent over the past year, according to the latest analysis by the Associated General Contractors of America. Last month’s lower employment rate in construction is due more to a tight job market than softening demand, said AGC.

“The construction industry unemployment rate in May was even lower than for the overall economy,” said Ken Simonson, the association’s chief economist. “Even though average pay in construction is 10 percent higher than in the private sector as a whole, the number of job openings keeps climbing.”

Simonson noted that the unemployment rate for jobseekers who last worked in construction declined to 3.2 percent from 4.4 percent a year ago and the number of such workers decreased over the year from 415,000 to 294,000.

“Federal officials can help bring new workers into the construction industry so firms can keep pace with demand,” said Stephen E. Sandherr, the association’s chief executive officer. “Funding more career and technical education programs is a proven way to expose more young adults to the many high-paying career opportunities available in this industry.”