Key Points:
- U.S. manufacturing employment continues to emerge from its secular decline.
- Manufacturing employment remains well about its pre-2017 trend, with the economy adding 423,000 manufacturing jobs since December 2016 relative to a linear trend estimated from January 2015 through December 2016.
- The net change in manufacturing employment since December 2016 has been 495,000 manufacturing jobs.
- The outlook for the manufacturing sector is positive, with January’s purchasing managers index (PMI) increasing 3.1 percentage points from December and expanding for the first time after a five-month contraction.
Economist Corner:
Over the past 38 months, the U.S. manufacturing sector has increased employment by 495,000, or 423,000 compared to trend. This more than reverses the decline in manufacturing employment over the previous 38 months of 277,000 jobs. Increased demand for manufactured goods, and the expensing provisions in the 2017 tax act, contributed to the re-emergence of the manufacturing sector. The most recent PMI indicates an expansion in the U.S. manufacturing sector despite global headwinds – a positive indicator of things to come.