The Case of the Missing Manufacturing Workers

Manufacturing was a bit of a disappointment in the April jobs report, growing quite slowly despite a lot of indicators from output measures that America is making a lot more stuff. To add to my surprise at the lack of hiring, look at this charge of hours worked in the manufacturing sector as of the March report. The country’s factory workers were working at the highest peacetime rate on measure. Clearly firms were poised to respond to increased demand by hiring workers and easing off on the per-worker hours. But no! Instead in the April report “The manufacturing workweek edged up by 0.1 hour to 40.8 hours, and factory overtime rose by 0.1 hour to 3.4 hours.”


To repeat, the manufacturing workweek was at a length we haven’t seen since World War II and then it went up. What’s more, yesterday we got a report on productivity that said “Manufacturing sector productivity rose 5.9 percent in the first quarter of 2012, as output grew 10.8 percent and hours worked increased 4.6 percent.”

That all seems to further build the case that we’re due for a hiring surge since it doesn’t really make sense to try to keep piling on overtime. But if firms are worried that demand may not hold up, that can make them hesitant to add workers.