WASHINGTON – The biggest decline in factory jobs in two years reported Friday by the Labor Department adds to signs that manufacturing is bearing the brunt of the slowdown in global growth.
Factory payrolls declined by 15,000 workers last month, the biggest drop in two years, according to figures from the Labor Department.
The report also showed the workweek shrank and the share of industries hiring plunged to the lowest level in almost three years.
Combined with earlier reports showing less demand for capital equipment and growing pessimism among purchasing managers, Fridays figures show manufacturing, which helped lead the U.S. out of the worst recession in the post-World War II era, is pulling back.
Companies such as Intel Corp. are among those cutting forecasts as business investment cools and economies from Europe to Asia slow.
There is a clear loss of momentum in manufacturing, said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Mass. I dont think manufacturing is going into reverse, but I think its stagnating.
While the drop in factory hiring last month was magnified by changes in the annual shutdowns at auto plants, the decline extended beyond a single industry. Producers of wood products, fabricated metals, electrical equipment and semiconductors also reduced headcounts in August, the report said.
Makers of motor vehicles and parts cut staff by 7,500 workers last month, representing a partial payback from the 14,000 gain in July. Automakers shut fewer plants during the annual retooling in July to rebuild depleted inventories and thus furloughed fewer workers than projected.
The workweek for all factory employees fell to 40.5 hours on average in August, the lowest since November and down from 40.7 hours the previous month, the figures showed. The number of hours had been as high as 40.9 in the first two months of 2012.
A gauge of the share of manufacturers hiring last month plunged to 36.4, the weakest since November 2009, from 50.6 in July, the data showed. Readings lower than 50 indicate fewer industries took on staff.
Fridays jobs report comes on the heels of other data that indicated assembly lines were slowing.