Manufacturing has been on the decline in America for decades now, and despite all the contributions that bad trade deals and globalization have made towards that decline, the biggest culprit has been efficiency. America is producing more than ever – we can just do so with less workers thanks to increased mechanization.
Look at a chart of the number Americans employed in the manufacturing sector, and it’s a pretty constant decline. That’s why many were skeptical when President Donald Trump promised to held restore America’s manufacturing base. When it’s been declining for decades thanks to a whole host of factors (many of which are beyond the President’s control), what would stop it now?
The answer, apparently, is President Trump.
According to Breitbart,
Over the last 12 months, manufacturers have added 224,000 jobs. That’s the biggest annual gain since 1998, according to Wall Street economist Joe LaVorgna. Since the 2016 election, the economy has added 263,000 manufacturing jobs. Last month, 31,000 new manufacturing jobs came online.
As a result “The manufacturing sector is adding jobs at a faster pace than the rest of the economy, which hasn’t happened much over the past half-century.” Manufacturing employment is still 8.24 percent below its pre-recession peak of 13.7 million jobs, but that employment figure has finally stopped declining every year.
As one market analyst at Seeking Alpha observed,
Over the full course of the 2000s expansion (six years, from November 2001 to November 2007), manufacturing payrolls fell by more than 13% or more than 2 million jobs. That was in spite of robust expansions in employment. In fact more manufacturing jobs were lost in the 2000s expansion than any post-WW2 recession including 2007-2009! So why is this expansion different? Almost one million net new manufacturing jobs have been created, with a bit more than a quarter of those coming in the last 12 months. Manufacturing payrolls’ secular decline from 1990 to 2010 now appears to be over.
To see this, in the chart below, we show the cumulative change in manufacturing payrolls in recessions (dark blue lines) and expansions (light blue lines). While total manufacturing payrolls are still a shadow of their 1970s self (35% below the record level from 1979), their solid gains this expansion is a big change from the last few cycles.
This is fantastic news, especially for Trump’s base, which is overwhelmingly blue-collar and working-class. And with the newly announced tariffs against steel and aluminum, perhaps America’s manufacturing sector just got another much-needed boost.
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