According to the National Association of Manufacturers’ (NAM) Monday Economic Report for this week, manufacturing employment rose by 55,000 in April, the strongest monthly gain in nine months, with durable and nondurable goods net job growth of 31,000 and 24,000, respectively. Through the first four months of 2022, the sector hired 174,000 employees, building on the 365,000 workers added in calendar year 2021. The manufacturing sector has 12,729,000 employees, with 56,000 fewer workers today relative to February 2020. Manufacturing employment is on track to return to pre-pandemic levels by Q3 2022.
Eight manufacturing sectors have exceeded their pre-pandemic employment levels as of April: chemicals (+35,500), food manufacturing (+35,200), miscellaneous nondurable goods (+28,000), plastics and rubber products (+24,000), wood products (+23,000), electrical equipment and appliances (+12,000), miscellaneous durable goods (+10,000) and furniture and related products (+2,000).
The Federal Open Market Committee (FOMC) voted to increase the federal funds rate by 50 basis points at the conclusion of its May 3–4 meeting with the current range being 0.75–1.00%. The FOMC’s efforts are meant to cool inflationary pressures in the economy, and it is anticipated that the Federal Reserve will hike interest rates by another 50 basis points at its upcoming June 14–15 meeting, with additional increases forthcoming at later meetings.
In addition to increases in the federal funds rate, the FOMC also voted to start reducing the size of its balance sheet, which has ballooned to nearly $9 trillion, beginning on June 1. It will reduce its holdings of Treasury securities by up to $30 billion each month and of mortgage-backed securities by up to $17.5 billion each month. After three months, it will step up those reductions to $60 billion and $35 billion each month, respectively.