President Trump likes to remind everyone that American manufacturers are giddy “like never before.” He fully expects that to translate into “jobs, jobs, jobs.”
He’s likely to take another victory lap on Friday, when the Labor Department releases the latest data on U.S. jobs at 8:30am ET. CNNMoney’s survey of economists predicts a healthy 187,000 jobs were added in March (that’s actually the average monthly job gains achieved last year under President Obama). The unemployment rate is expected to stay at 4.7%.
But what about manufacturing? The Great Recession hit the industry hard, but hiring has started to pick up again. There were 28,000 new manufacturing jobs in February, Trump’s first full month in office, and March is expected to show more gains.
“We believe in two simple rules: Buy American, and Hire American,” Trump said (again) this week.
But it’s worth remembering that employment in manufacturing is currently at 1941 levels.
The glory days of manufacturing were the 1970s. Back then, over 19.5 million Americans earned their paycheck from factory work. It’s been a fairly steady decline ever since. Today only 12.4 million workers remain in the industry.
Manufacturing output is back, but the jobs aren’t
The reality is some of the jobs once done by human hands are now done by robots. U.S. manufacturing output is at an all-time high, but manufacturing employment remains subdued. It’s come back a little since hitting a nadir of 11.5 million in 2009, but it’s not even back to pre-crisis job levels, let alone the glory days.
“We certainly saw a sizable jump in manufacturing hiring last month,” says economist Sam Bullard of Wells Fargo. “That said, I am not so sure we will be able to maintain this current pace over the course of the year.”
Still, the manufacturing industry is cheering on Trump. According to a recent survey by the National Association of Manufacturers, 93% of its 14,000 members have a positive outlook for U.S. manufacturing. It’s the highest level of optimism in 20 years.
Manufacturers like what they hear from the White House about tax reform and more infrastructure spending.
“How much job growth occurs will depend significantly on how taxes might change,” argues economist and forecaster Lynn Reaser of Point Loma university.
But overall, only 8% of U.S. workers are employed in manufacturing today, a big drop from 22% in 1970. Even if hiring picks up somewhat, Trump will need other industries to blossom as well if he’s going to achieve his promise to be the “greatest jobs producer that God ever created.”