The Manufacturing Downturn Compared to 2014-16

In 2014-16, production and non-supervisory employment continued to rise even as hours and production declined. In 2018-19 (as discussed here), all three have declined relative to peak.

Figure 1: Manufacturing employment – production and nonsupervisory workers (blue), aggregate hours (teal), manufacturing production (red), in logs 2014M11=0. Source: BLS, Federal Reserve Board, via FRED, and author’s calculations.

“More Signs of Contraction – When Will the GDP Turn Negative?”

From Cass Freight Index Report – September 2019:

With the -3.4% drop in September, following the -3.0% drop in August, -5.9% drop in July, -5.3% drop in June, and the -6.0% drop in May, we repeat our message from the previous four months: the shipments index has gone from “warning of a potential slowdown” to “signaling an economic contraction.

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Capital Goods Imports and Equipment Investment


The last time we saw equipment investment declining was 08Q1; and capital goods imports  in 08Q3

Figure 1: Imports of capital goods other than automobiles (blue, left scale), and equipment investment (brown, right scale), both in billions of Ch.2012$, SAAR. Source: BEA, 2012Q2 2nd release.

Given depreciation, net equipment investment is probably declining.

In Bizarro World

Bryan Riley at NTU brings my attention to this press release:

The Coalition for a Prosperous America (CPA) has won the prestigious Edmund A. Mennis Award from the National Association for Business Economics (NABE) for a study showing that a permanent tariff on China would benefit the US economy. The award from the nation’s leading association of business economists confirms a growing acceptance of pro-US trade policies needed to address the nation’s economic challenges.

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