Manufacturing production average worker week
The US Bureau of Labor Statistics conducts the monthly establishment survey and reports the number of hours worked by the manufacturing (FXR) sector workers. A large portion of the US workforce is employed by the manufacturing (ITA) sector, and increasing working hours in the sector is a positive sign for the economy.
Manufacturing (IYJ) companies’ provisions for longer hours in response to increased demand for their products is a sign that the aggregate demand in the economy is improving.
Manufacturing average weekly hours: Unchanged in March
According to the latest Conference Board Leading Economic Index (or LEI) report, the average working hours for production workers decreased marginally to 42.2 hours, compared to the upward revised February reading of 42.3 hours.
In our view, this minor decline shouldn’t be any source of concern, as the March reading is the second-best reading in the last eight months. This forward-looking indicator had a net impact of -7.0% on the March LEI reading.
Key industries and ETF performance
The manufacturing sector has been improving in the last few years, and the recent industrial (VIS) production data confirms that growth. Industrial production has increased by 4.5% annually in this first quarter.
The SPDR Industrial Select Sector ETF (XLI) is one of the major ETFs in the manufacturing sector, and it has managed to recover after posting ~3.0% losses in February and March this year. The impact of tariffs could boost demand in the near term for a few industries in the sector. However, the impact could be neutral on all industries—or even negative if these trade tensions escalate.
In the next part of this series, we’ll analyze the impact of weekly jobless claims on the Conference Board Leading Economic Index.