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Manufacturing employment returns to pre-pandemic level

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A worker assembles the interior of a safe at Liberty Safe Co. in March in Payson, Utah.

Data on worker productivity in the second quarter is due to come out Tuesday, which could show continued declines as a result of the pandemic. George Frey/Getty Images

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The Labor Department reported Friday that the number of manufacturing jobs rose by 29,000 in June — and that means manufacturing employment has finally returned to its pre-pandemic level.

The COVID-19 pandemic made a lot of manufacturers realize that relying on the global supply chain doesn’t always work out. Scott Paul, president of the Alliance for American Manufacturing, said that’s why a lot of companies have been expanding in the United States.

“Major semiconductor companies, you’ve seen Ford and GM, you’ve seen some other automakers make massive new investments in big factories,” he said.

Those kinds of investments don’t only require manufacturing jobs; a lot of new manufactured goods require a lot of digital components, said Dartmouth College business professor Teresa Fort. And that means hiring engineers and other types of service-sector jobs.

“Think about your talking refrigerator, right? And so that requires a lot of workers that might not necessarily be in a manufacturing plant,” she said.

Demand for manufactured goods has started to ease up a bit, in part because consumers have been spending less on goods and more on things like traveling and going out to eat.

But manufacturers still have a big backlog to get through, according to Tim Fiore at the Institute for Supply Management.

“You know, we’ve had two or three months of softening new order levels, and therefore we’re eating into the backlog,” he said.

A bigger issue, Fiore added, is that even though manufacturers are hiring, companies he’s surveyed are also shedding workers fast.

“We have an excessively high amount of quits. It continues to happen. And in addition, in the month of June, we had more respondents commenting that they saw more early retirements than they had in the prior couple of months.”

As a result, Fiore said manufacturing production could have trouble keeping up.

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