by Calculated Risk on 3/01/2011 10:33:00 PM

It is time for a scatter graph ...

Earlier today, I noted that the ISM manufacturing employment index was the highest level since January 1973 at 64.5, but the impact on overall employment would be less than in '73. This is because manufacturing employment is a much smaller percentage of overall U.S. employment now. In 1973, almost 30% of private payroll employment was manufacturing (18.3 million), today it is less than 11% (at 11.6 million). So the same ISM manufacturing employment reading today suggests a much smaller impact on overall U.S. employment than in 1973.

It is still good news, and the ISM survey suggests manufacturing employment grew at around 60,000 in February.

Click on graph for larger image in graph gallery.

This graph shows the relationship between the ISM manufacturing employment index and the change in BLS manufacturing employment (as a percent of the previous month employment).

The two yellow dots are for January 2011 (61.7 ISM and 49,000 jobs), and a forecast for February based on the ISM employment reading of 64.5.

There was a time when a 64.5 might mean a couple hundred thousand payroll jobs, but now it suggests around 60,000 jobs (with plenty of noise). Still helpful, but not the same overall impact as in the '50s, '60s or even '70s.

Earlier:
• ISM Manufacturing Index increases in February
• Private Construction Spending decreases in January
• U.S. Light Vehicle Sales 13.44 million SAAR in February
• Graphs: ISM manufacturing, Construction Spending, Vehicle Sales