Manufacturing production average worker week
The monthly establishment survey conducted by the U.S. Bureau of Labor Statistics includes a report on the number of hours worked by manufacturing (FXR) sector workers. A large proportion of the US workforce is employed by the manufacturing (ITA) sector.
An increasing number of working hours in this sector is a positive sign for the economy. Increasing working hours in the manufacturing sector (IYJ) indicates that employers are anticipating higher demand, which is a strong signal for the economy.
Manufacturing average weekly hours decreased in May
According to the latest Conference Board LEI (Leading Economic Index) report, the average number of working hours for production workers decreased marginally to 42.2 hours compared to the April reading of 42.4 hours.
The decline in the number of hours is a minor normalization after a steep increase in the previous month. This forward-looking indicator had a net negative impact of 0.13 (or 13.0%) on the May LEI reading.
Key industries and ETF performance
Activity in the manufacturing sector has been improving in recent months, helped by the reduced tax rate and changes to the accounting practice of expensing capex investments. The ISM manufacturing (VIS) index was close to the March high of 60.8 and was reported at 58.7 in June.
The SPDR Industrial Select Sector Fund (XLI) is one of the major ETFs in the manufacturing sector. This sector has had only one positive monthly close since February and remains under pressure, as global trade uncertainty dented investor confidence.
In the next part of this series, we’ll analyze the impact of weekly jobless claims on the Conference Board Leading Economic Index.