July 12, 2004
"The loss of 11,000 manufacturing jobs in June, following gains of 75,000 the previous four months, is a temporary setback and not a trend," said David Huether, chief economist of the National Association of Manufacturers (NAM).
According to the June employment report released July 2 by the U.S. Department of Labor, the economy added 112,000 payroll jobs in June while the unemployment rate remained unchanged from May at 5.6 percent. "Construction employment remained flat last month as overall construction activity slowed," Huether said. "About a quarter of the deceleration in job growth was due to anemic increases in retail trade and leisure/hospitality sectors, which have been impacted by the rising price of gasoline as consumers have curbed spending patterns somewhat. Together, these three sectors explain about half of the slowdown in job growth last month.
"[June's] report of lower-than-expected job growth is disappointing, with the number of new payroll jobs in June equaling just a third of the 304,000 average during the prior three months," Huether said. "On a positive note, oil and gasoline prices have been trending downward in recent weeks, so consumer should begin to see some relief in coming months.
"Without question, the 11,000 drop in manufacturing employment was also an unwelcome surprise," Huether said. "However, one month does not make a trend and I do expect the employment recovery in manufacturing to get back on the positive track in short order because domestic manufacturing production has been accelerating in recent months and our members have generally been optimistic on the employment front."