by Calculated Risk on 12/01/2009 02:45:00 PM

From the ISM Manufacturing report on employment:

ISM's Employment Index registered 50.8 percent in November, which is 2.3 percentage points lower than the 53.1 percent reported in October. This is the second month of growth in manufacturing employment following 14 consecutive months of decline. An Employment Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

The following graph shows the ISM Manufacturing Employment Index vs. the BLS reported monthly change in manufacturing employment (as a percent of manufacturing employment).

The graph includes data from 1948 through 2009. The earlier period (1948 - 1988) is in red, and the last 20 years is in green. The blue diamond is for last month (manufacturing employment fell in October even though the ISM employment Index was at 53.1 percent).

Click on graph for larger image in new window.

Clearly the ISM employment index is related to changes in BLS employment, however the relationship is noisy, and it appears a reading above 52 for the ISM employment index is consistent with an increase in the BLS data for manufacturing.

Although there is significant variability, the current level of 50.8 percent in November suggests further manufacturing job losses.