Business

Big jumps in higher-paying factory, construction jobs boost optimism

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WASHINGTON -- Big gains in factory and construction jobs last month have experts optimistic that the labor market is starting to produce enough higher-paying jobs to fuel stronger economic growth.

"It's not just the quantity of the jobs but the quality," Diane Swonk, chief economist at Mesirow Financial, said of Friday's Labor Department report of a surprisingly strong 203,000 net new jobs added in November.

Of those hires, manufacturers accounted for 27,000, the most since March 2012 and a sharp increase from October's 16,000 new jobs.

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The construction industry grew by 17,000 jobs in November, up from 11,000 the previous month, as the housing market rebound led to more demand.

"These are higher-wage jobs, and a shift from a reliance on leisure and hospitality and retail gains we had seen in recent months," Swonk said.

The gains in manufacturing and construction helped offset declines in the service sector.

The service industries added 152,000 jobs in November, down from 183,000 the previous month. Retailers increased their payrolls by a seasonally adjusted 22,300, down from 45,800 in October.

Leisure and hospitality businesses added 17,000 jobs in November, down from 49,000 the previous month.

The manufacturing job increases bring the nation's factory workforce above 12 million for the first time since April 2009.

"Since the third quarter, we’ve seen a pickup in activity," said Chad Moutray, chief economist at the National Assn. of Manufacturers trade group. "It’s pretty clear that things have started accelerating a little bit."

The surging auto industry has helped boost factory payrolls and U.S. exports of airplanes and other manufactured goods have increased as the economies in Europe and other foreign countries have started rebounding, he said.

Domestic manufacturing growth has only recently been recovering after slowing down markedly starting in the middle of 2012 in the face of the fiscal cliff combination of tax increases and spending cuts that began in January, Moutray said.

He noted that manufacturers shed 2.3 million workers during the Great Recession and have added back just 543,000. Although those are the first gains in factory payrolls after decades of declines, Moutray said "there's still a lot of work to be done over the coming years."

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