In his State of the Union address last Thursday, President Biden said, “Where is it written that we can’t be the manufacturing capital of the world? We are. We will.”
The next morning came the deflating news that U.S. manufacturing employment fell by 4,000 jobs in February. That doesn’t mean Biden was wrong. It does signal that he has taken on a difficult challenge.
Accentuating the positive, Biden’s Council of Economic Advisers is calling attention to the fact that the manufacturing sector has done way better than it usually does after a recession. Manufacturing employment has increased 1.4 percent in the four years since February 2020, when the short, sharp Covid recession began. Here’s a chart I put together, inspired by one from Biden’s economic team.
In the 11 recession recoveries that have occurred since 1953, there’s been only one time when manufacturing employment posted a bigger percentage gain — and that one just barely. Manufacturing cratered after the two recessions that preceded the Covid crash, as the chart shows.
On the other hand, manufacturing employment isn’t what’s leading job growth. Manufacturing’s share of nonfarm employment was 8.2 percent in February, down from 8.5 percent when Biden took office. Another way to look at the numbers is factory output. According to Federal Reserve data, industrial production in manufacturing is slightly lower now than it was in the years before the Covid recession.
