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. The manufacturing sector (ITA) employs a large portion of the US workforce, and increasing worker hours is a strong signal for the economy. Increasing working hours in the manufacturing sector (IYJ) is a sign that employers are anticipating higher demand in the future, which is a positive sign for the economy.
Manufacturing average weekly hours increased in April
As per the latest Conference Board Leading Economic Index (or LEI) report, the average working hours for production workers increased marginally to 42.4 hours compared to the February reading. This is the best number for this index in the last seven months and an indication that the manufacturing sector could continue to improve in the near term. This forward-looking indicator had a net positive impact of 0.13 (or 13%) on the April LEI reading.
Key industries and ETF performance
The manufacturing sector has continued to improve in recent months, and the latest economic data including the ISM manufacturing (VIS) index, industrial production, and capacity utilization indicated that the improving trend remained intact. The SPDR Industrial Select Sector Fund (XLI), which is one of the major ETFs in the manufacturing sector, managed a pullback in May after three consecutive monthly losses since February. The YTD return is still negative, but the positive momentum from earnings season is likely to push the sector into positive YTD returns in the near term. In the next part of this series, we’ll analyze the impact of weekly jobless claims on the Conference Board Leading Economic index.