The Bureau of Labor Statistics (BLS) recently released the 2024 Preliminary Benchmark Revision of the Current Employment Statistics (CES), revealing that total nonfarm jobs were 818,000 fewer than previously estimated for the twelve months ending in March 2024. While CES survey employment estimates are benchmarked annually against comprehensive March employment counts, the magnitude of this downward revision has raised concerns.
Upward and Downward Revisions
Professional and business services employment saw the largest downward jobs revision of 358,000. Manufacturing employment was also revised down by 115,000 over the same period. Conversely, there were upward revisions: private education and health services employment increased by 87,000, and transportation and other services were revised upward by 56,400 and 21,000, respectively. While specific industries did not break down the manufacturing revisions, these revisions will eventually be reflected in the monthly industry workforce statistics.
Why Is this Important to the Plastics Industry?
Employment is a key economic indicator of economic growth. The labor market continues to reflect changes in the economy’s aggregate demand and supply dynamics. Therefore, revisions to employment data are neither surprising nor trivial, as they can be valuable in assessing the business landscape.
First, the manufacturing sector, a primary customer of the plastics industry, is particularly important. The lower employment rate in manufacturing suggests reduced manufacturing activity, which can have both upstream and downstream ripple effects. For plastics and rubber product manufacturing, the preliminary employment estimate for July was 724,000, nearly matching the monthly average of 725,300 in 2021.
Secondly, PLASTICS releases its Annual Size and Impact Report each year, which quantifies the plastics industry across the supply chain and its contribution to the broader economy.* A decrease in manufacturing employment might be offset by increased service employment. Based on 2022 data, total jobs related to the plastics industry numbered 209,000 in manufacturing and 483,000 in services.
Third, changes in government data have far-reaching policy implications. Institutions, including the Federal Reserve, have publicly acknowledged that their policy actions have been and will continue to be data-dependent, and rightfully so. Still, data quality and reliability are crucial.
The U.S. policy shift to support a global goal of reducing plastic production as part of a global plastics treaty is shortsighted. The effect of such a policy on the U.S. labor market is net negative, considering the interlinkages of plastics production throughout the economy’s value chain—whether in manufacturing or services. Unfortunately, with lower employment numbers than previously estimated, policies are being deliberately considered to further reduce the ability of industries to generate employment throughout the broader economy. Based on the Economic Policy Institute’s estimates, 100 direct jobs in durable goods manufacturing create a total of 744.1 jobs, while 100 direct jobs in nondurable goods manufacturing create 514.3 jobs.*
The revisions in manufacturing employment by industry are yet to be released. According to the BLS, the CES will be updated when the final benchmark revision and monthly employment estimates in January 2025 are issued.
