Excuse me? Did you Say “Durable Goods Jobs?”
The Labor Department’s most recent Employment Situation Report was met with mixed reviews Friday morning. On the one hand, the private sector added 212,000 new jobs, continuing a positive—if somewhat modest—rate of improvement, and the unemployment rate ticked down again to 8.5%. On the other hand, the labor participation rate (i.e., the percentage of the total population which is either employed or looking for work) continues to hold the absolute level of unemployment at a frustratingly high level. From our perspective, the key is consistent progress, and that’s what we’re seeing.
As we’ve written before, we think there is a common misconception that the U.S. doesn’t manufacture durable goods any more. The data suggest otherwise. While total private sector employment grew by 1.8% between December 2010 and December 2011, Durable Goods Manufacturing jobs increased by 3.4%—nearly twice the overall rate. In fact, among the 20 private sector industries and industry groups Peloton tracks, only the relatively tiny Mining & Logging group grew at a faster rate (mainly due to natural gas exploration & production) than Durable Goods Manufacturing.
With that as background, we found the Wall Street Journal article “U.S.: A Cheaper Labor Pool” to be illustrative. As U.S. businesses grow leaner and employees increase their productivity, our manufacturers are better positioned to compete in heavy goods manufacturing. We believe that “Right to Work” laws in several U.S. states are contributing to this competitiveness and hope to see more state legislatures pass Right to Work initiatives this year.
We’re not Pollyannaish: the global economy still faces headwinds, from a Chinese slowdown to the seemingly interminable European debt crisis. But it seems that the U.S. may well help lead the global economy toward a sustained expansion—in part by making and selling more durable goods competitively.
Posted in Current Updates