Analysis of current economic conditions and policy
Manufacturing Employment, Hours Decline in September
Figure 1: Manufacturing employment – production and nonsupervisory workers (blue), aggregate hours (teal), manufacturing production (red), in logs 2019M01=0. Source: BLS, Federal Reserve Board, via FRED, and author’s calculations.
33 thoughts on “Manufacturing Employment, Hours Decline in September”
Willie
This sure is a confused time for economic data, what with housing doing pretty well. Housing was so far down after the last recession that it started at such a low level that it could continue to look OK even if everything else falls.
This is one of those times when the president can have an outsize effect on the economy. In a bad way, but there you have it. The economy could come in for a soft landing, as it seems to have done in 2015 and 2016. There were downturns in parts of the economy that didn’t take everything else down. This time, there’s a toxic combination of tariffs and erratic behavior that could easily create the shock that puts us into recession. When the tariffs hit, it will feel like price inflation without wage increases to the average person, who will react accordingly. I don’t see the current president as having the ability to separate his personal peeves from the good of the country, and that means that if China doesn’t do whatever it is that Trump wants them to do at the time, there will be no resolution of the tariff wars. I don’t know what to make of the tariff wars with Europe except that it’s bone-headed and will hurt the US economy.
The 10-2 inversion seems to be over, meaning that if my usual rule of mindless mechanical analysis holds true to form, we are about six months away from a recession. Which will have an effect on the election. Politics has economic fallout, and economics has political fallout.
rjs
willie, housing has been moving pretty much in lockstep with interest rates….other construction, not so much
adjusted for inflation (using the producer price index for final demand construction), real construction for the 2 months of the 3rd quarter that we have data for has fallen at a 5.96% annual rate from that of the 2nd quarter…
Willie
I will have to look for a more detailed breakdown. Shifting military construction funds from everywhere else to Texas has to help Texas with a little socialist boost, but it will lower activity elsewhere. That will not be good for construction.
There is an ongoing multi-family boom here in Seattle, but I suspect this area may be an anomaly due to the insane growth of Amazon and other tech companies. I do not see the same number of cranes on the skyline lately. That is an indicator.
rjs
ok, i find i made a small math error in computing that real construction contraction rate from the 2nd to the 3rd quarter; it’s at a 6.08% annual rate, not 5.96%…
for a more detailed breakdown of what goes into the construction data, check out the monthly census report: https://www.census.gov/construction/c30/pdf/release.pdf
residential is less than 40%; big ticket items you may not have thought of include highways and power, which would include things like wind farms..
Willie
As a long time part of the construction world, I think about all those things. All kinds of infrastructure projects, power plants, roads, rail, you name it – it’s all part of what the construction industry does. The same form carpenters build formwork for concrete, no matter what the final structure, for instance. When they are out of work, it’s a drag on the overall economy.
Willie
As a follow up – there was an article in the paper this morning that noted a steep downturn in orders at Genie Lift, who are a construction equipment supplier. The article also noted a sharp decline in architectural billings. I had missed that data point when it originally came out. Single family builders generally do not use architectural services, and often do not use mechanical lifts.
So there is the leading evidence. Construction will be off in 2020.
Looks like Obama was right about Trump’s fake promise to revive manufacturing jobs. Forbes never saw the trade war coming.
ooe
Actually, the ISM numbers confirm BHO’s prediction. the Sept ISM manufacturing report shows factory employment declining which show up in the Oct employment report. Also, the promised surge of investment because of the 2017 tax cut did…not happen.
We are already in recession.
Southern Evangelicals know that Jesus cared about and sometimes fed the poor. The stories of Jesus feeding the poor food are sprinkled about in the New Testament. That is why >95% of Southern Evangelicals voted for trump
2slugbaits
Fishes and loaves is supply side economics.
Moses Herzog
I don’t like supply side econ—but they can label it anything they like if it means children don’t go hungry. Another American ideal that was at the core of this nation’s values before Republicans started calling the shots.
Willie
Only if they do not get eaten.
Moses Herzog
@ Willie
My friend, more like “only if the fishes and loaves EVER ‘dripped down’ “.
Moses Herzog
*”trickled down” DAMN. That time you forgot the things you were trying to forget actually succeeded.
Will the ghost of the Gipper and Martin Feldstein EVER forgive me?? The guilt is weighing heavy now.
She’s got a column in the NYT website today. I can’t get past the paywall to read it. And I’m not sure if the hardcopy will be in Saturday’s or Sunday’s paper but I wanna read that. If a Democrat wins the White House in 2020 I’m hopeful she will get a very high ranking position in the State Dept. or the Defense Dept. or whatever job she herself thinks she’s best qualified to do.
dilbert dogbert
NYT Paywall in firefox and private browsing.
log in
click on the article
in the URL line there will be a small icon that appears. click on it.
if that doesn’t work. be ready for the page to load again and hit the icon quickly
or repeatedly click on the icon.
most of the time this works for me.
This is top secret!!!!
Some more breakdown on the donald trump’s diplomats’ mobile phone interactions, along with (near the end) thoughts on Marco Rubio’s asinine and sissified comments: https://www.youtube.com/watch?v=MT3_2tpPpQE
Marco Rubio is similar to Ted Cruz. There’s honest to God no other way I can think to express it other than Rubio and Crux seemingly enjoy being B__-slapped by donald trump. You can say what you about “all is fair in love and war” and I can accept that up to a point, but donald trump has completely emasculated both of these men, yet they go back to trump to get paddled again and again like he’s their dominatrix or something. It’s not just surreal, it’s otherworldly to watch grown men, bend over for this man.
pgl
Little Marco is scared of Trump’s big **** I guess.
Moses Herzog
I know Menzie about gets his belly-full of these comments from me, but honestly for the women in donald trump’s life I really do hope it’s bigger than his hands.
pgl
Stormy Daniels report it is not so big. But the DONALD has a big bank account!
In a slow growth economy you should not expect to see consistently slow economic growth.
Rather, you should expect a few months (quarters) of very weak growth followed by a few quarters of somewhat stronger growth.
But the average remains sluggish despite some bulls citing the strong data and the bears citing the weak reports.
Every school of thought gets a chance to claim they are right.
Moses Herzog
@ spencer
Deep…… wait, I need to get my notebook and take notes for this. I haven’t heard something this complex since Tamara Keith described the progression of donald trump’s Twitter feed over the last 2 years.
“In a slow growth economy you should not expect to see consistently slow economic growth. Rather, you should expect a few months (quarters) of very weak growth followed by a few quarters of somewhat stronger growth.”
Spencer, can you put this in equation form as a proof?? You’ve only got one week left before they announce the Nobel in Economics and I’m afraid this jewel of insight could be lost forever.
2nd Whistleblower May Come Forward On Trump’s Ukraine Call
Another official with more information on the White House’s Ukraine plans is thinking about filing a whistleblower complaint
A second intelligence official with even more direct information on President Donald Trump’s efforts to pressure Ukraine into meddling in the presidential election may come forward to Congress, The New York Times reported Friday night.This potential whistleblower reportedly has firsthand knowledge of the White House’s interactions with Ukraine and was interviewed by the intelligence community’s inspector general during an investigation into the first whistleblower’s complaint about a July 25 call with the president of Ukraine.
AS
Professor Chinn,
Would you mind sharing what data series you used for the aggregate hours (teal) curve? I tried several ways to tie-into your curve. I used FRED series: CES3000000034, which is an index of aggregate weekly hour of production and nonsupervisory employees: manufacturing. I also summed the “regular hours” plus overtime hours and multiplied by the production and nonsupervisory employees: manufacturing, FRED series: CES3000000006. Each of the resultant curves is a bit different. Same conclusion would be represented, but not exact. I imported the weekly data into an EViews monthly model.
Thanks
Thanks. That was my main assumption, but am having a difficult time getting an exact match with your curve.
Thanks again!
AS
Professor Chinn,
Sorry to be dense, but it looks like CES3000000034 peaks in January 2019 at 86.8 and not in December 2018 at 86.6. What am I missing?
Thanks.
The Rage
Census and related local/state hiring to support census is going to artificially lower unemployment until spring. It did so in 99-00 as well before unemployment jumped in May-August 2000. Likewise, what a bad time for that in 2020 eh???
Moses Herzog
I have an acquaintance who was recently employed by the Census Bureau. One of the biggest losers I know. The job he was in essence fired from before working for the Census?? May I have a drum roll please??
Census employment peaked in May 2000 at 530 thousand. So far in 2019 Census employment has reached only 28 thousand but that will grow.
So let’s be fair here. BLS keeps track of Census workers for us. Of course I doubt it has a handle on all the lawyers that will be needed to protect those emerging whistleblowers.
This sure is a confused time for economic data, what with housing doing pretty well. Housing was so far down after the last recession that it started at such a low level that it could continue to look OK even if everything else falls.
This is one of those times when the president can have an outsize effect on the economy. In a bad way, but there you have it. The economy could come in for a soft landing, as it seems to have done in 2015 and 2016. There were downturns in parts of the economy that didn’t take everything else down. This time, there’s a toxic combination of tariffs and erratic behavior that could easily create the shock that puts us into recession. When the tariffs hit, it will feel like price inflation without wage increases to the average person, who will react accordingly. I don’t see the current president as having the ability to separate his personal peeves from the good of the country, and that means that if China doesn’t do whatever it is that Trump wants them to do at the time, there will be no resolution of the tariff wars. I don’t know what to make of the tariff wars with Europe except that it’s bone-headed and will hurt the US economy.
The 10-2 inversion seems to be over, meaning that if my usual rule of mindless mechanical analysis holds true to form, we are about six months away from a recession. Which will have an effect on the election. Politics has economic fallout, and economics has political fallout.
willie, housing has been moving pretty much in lockstep with interest rates….other construction, not so much
adjusted for inflation (using the producer price index for final demand construction), real construction for the 2 months of the 3rd quarter that we have data for has fallen at a 5.96% annual rate from that of the 2nd quarter…
I will have to look for a more detailed breakdown. Shifting military construction funds from everywhere else to Texas has to help Texas with a little socialist boost, but it will lower activity elsewhere. That will not be good for construction.
There is an ongoing multi-family boom here in Seattle, but I suspect this area may be an anomaly due to the insane growth of Amazon and other tech companies. I do not see the same number of cranes on the skyline lately. That is an indicator.
ok, i find i made a small math error in computing that real construction contraction rate from the 2nd to the 3rd quarter; it’s at a 6.08% annual rate, not 5.96%…
for a more detailed breakdown of what goes into the construction data, check out the monthly census report: https://www.census.gov/construction/c30/pdf/release.pdf
residential is less than 40%; big ticket items you may not have thought of include highways and power, which would include things like wind farms..
As a long time part of the construction world, I think about all those things. All kinds of infrastructure projects, power plants, roads, rail, you name it – it’s all part of what the construction industry does. The same form carpenters build formwork for concrete, no matter what the final structure, for instance. When they are out of work, it’s a drag on the overall economy.
As a follow up – there was an article in the paper this morning that noted a steep downturn in orders at Genie Lift, who are a construction equipment supplier. The article also noted a sharp decline in architectural billings. I had missed that data point when it originally came out. Single family builders generally do not use architectural services, and often do not use mechanical lifts.
So there is the leading evidence. Construction will be off in 2020.
MAGA Didn’t Last for Forbes Magazine:
“While overall employment numbers (Obama vs. Trump) are comparable, the difference in manufacturing is profound. In the last 26 months of Obama’s presidency, manufacturing employment grew by 96,000 or 0.8%. In Trump’s first 26 months, manufacturers added 479,000 jobs, or 3.9%, 399% more jobs than Obama’s record.
Is it any wonder that President Obama derided then-candidate Trump for needing a “magic wand” to deliver on his manufacturing jobs promise?”
https://www.forbes.com/sites/chuckdevore/2019/03/11/trumps-policy-magic-wand-boosts-manufacturing-jobs-399-in-first-26-months-over-obamas-last-26/#68b5ebdf20a6
Looks like Obama was right about Trump’s fake promise to revive manufacturing jobs. Forbes never saw the trade war coming.
Actually, the ISM numbers confirm BHO’s prediction. the Sept ISM manufacturing report shows factory employment declining which show up in the Oct employment report. Also, the promised surge of investment because of the 2017 tax cut did…not happen.
We are already in recession.
donald trump cares about children, anyone who gets lost in this economy will be taken care of:
https://www.nytimes.com/2019/10/04/us/politics/trump-food-stamp-cuts.html
Southern Evangelicals know that Jesus cared about and sometimes fed the poor. The stories of Jesus feeding the poor food are sprinkled about in the New Testament. That is why >95% of Southern Evangelicals voted for trump
Fishes and loaves is supply side economics.
I don’t like supply side econ—but they can label it anything they like if it means children don’t go hungry. Another American ideal that was at the core of this nation’s values before Republicans started calling the shots.
Only if they do not get eaten.
@ Willie
My friend, more like “only if the fishes and loaves EVER ‘dripped down’ “.
*”trickled down” DAMN. That time you forgot the things you were trying to forget actually succeeded.
Will the ghost of the Gipper and Martin Feldstein EVER forgive me?? The guilt is weighing heavy now.
This interview was done September 27th. I plan on reading her book when it shows up at my local public library:
https://www.c-span.org/video/?c4819798/susan-rice-texas-tribune-2019
She’s got a column in the NYT website today. I can’t get past the paywall to read it. And I’m not sure if the hardcopy will be in Saturday’s or Sunday’s paper but I wanna read that. If a Democrat wins the White House in 2020 I’m hopeful she will get a very high ranking position in the State Dept. or the Defense Dept. or whatever job she herself thinks she’s best qualified to do.
NYT Paywall in firefox and private browsing.
log in
click on the article
in the URL line there will be a small icon that appears. click on it.
if that doesn’t work. be ready for the page to load again and hit the icon quickly
or repeatedly click on the icon.
most of the time this works for me.
This is top secret!!!!
Appreciate it very much Sir.
Does anyone know the exact moment Marco Rubio became donald trump’s menses pad???
https://twitter.com/DeFede/status/1180166630803939330
Some more breakdown on the donald trump’s diplomats’ mobile phone interactions, along with (near the end) thoughts on Marco Rubio’s asinine and sissified comments:
https://www.youtube.com/watch?v=MT3_2tpPpQE
Marco Rubio is similar to Ted Cruz. There’s honest to God no other way I can think to express it other than Rubio and Crux seemingly enjoy being B__-slapped by donald trump. You can say what you about “all is fair in love and war” and I can accept that up to a point, but donald trump has completely emasculated both of these men, yet they go back to trump to get paddled again and again like he’s their dominatrix or something. It’s not just surreal, it’s otherworldly to watch grown men, bend over for this man.
Little Marco is scared of Trump’s big **** I guess.
I know Menzie about gets his belly-full of these comments from me, but honestly for the women in donald trump’s life I really do hope it’s bigger than his hands.
Stormy Daniels report it is not so big. But the DONALD has a big bank account!
This appears to be some coverage of the MMT conference stream that I tried to link the other day with the horrible audio
https://newrepublic.com/amp/article/155249/spreading-gospel-modern-monetary-theory
In a slow growth economy you should not expect to see consistently slow economic growth.
Rather, you should expect a few months (quarters) of very weak growth followed by a few quarters of somewhat stronger growth.
But the average remains sluggish despite some bulls citing the strong data and the bears citing the weak reports.
Every school of thought gets a chance to claim they are right.
@ spencer
Deep…… wait, I need to get my notebook and take notes for this. I haven’t heard something this complex since Tamara Keith described the progression of donald trump’s Twitter feed over the last 2 years.
“In a slow growth economy you should not expect to see consistently slow economic growth. Rather, you should expect a few months (quarters) of very weak growth followed by a few quarters of somewhat stronger growth.”
Spencer, can you put this in equation form as a proof?? You’ve only got one week left before they announce the Nobel in Economics and I’m afraid this jewel of insight could be lost forever.
Trump sycophant Bruce Hall is going to hate this:
https://www.huffpost.com/entry/2nd-whistleblower-ukraine-trump_n_5d97e904e4b0fc935eda38f3
2nd Whistleblower May Come Forward On Trump’s Ukraine Call
Another official with more information on the White House’s Ukraine plans is thinking about filing a whistleblower complaint
A second intelligence official with even more direct information on President Donald Trump’s efforts to pressure Ukraine into meddling in the presidential election may come forward to Congress, The New York Times reported Friday night.This potential whistleblower reportedly has firsthand knowledge of the White House’s interactions with Ukraine and was interviewed by the intelligence community’s inspector general during an investigation into the first whistleblower’s complaint about a July 25 call with the president of Ukraine.
Professor Chinn,
Would you mind sharing what data series you used for the aggregate hours (teal) curve? I tried several ways to tie-into your curve. I used FRED series: CES3000000034, which is an index of aggregate weekly hour of production and nonsupervisory employees: manufacturing. I also summed the “regular hours” plus overtime hours and multiplied by the production and nonsupervisory employees: manufacturing, FRED series: CES3000000006. Each of the resultant curves is a bit different. Same conclusion would be represented, but not exact. I imported the weekly data into an EViews monthly model.
Thanks
AS: I used series CES3000000034.
Thanks. That was my main assumption, but am having a difficult time getting an exact match with your curve.
Thanks again!
Professor Chinn,
Sorry to be dense, but it looks like CES3000000034 peaks in January 2019 at 86.8 and not in December 2018 at 86.6. What am I missing?
Thanks.
Census and related local/state hiring to support census is going to artificially lower unemployment until spring. It did so in 99-00 as well before unemployment jumped in May-August 2000. Likewise, what a bad time for that in 2020 eh???
I have an acquaintance who was recently employed by the Census Bureau. One of the biggest losers I know. The job he was in essence fired from before working for the Census?? May I have a drum roll please??
https://www.youtube.com/watch?v=Ek56AgxwybI …………… Sports radio on-air host
BLS has this handy link:
https://www.bls.gov/ces/tables/census-temporary-intermittent-workers-government-employment.htm
Census employment peaked in May 2000 at 530 thousand. So far in 2019 Census employment has reached only 28 thousand but that will grow.
So let’s be fair here. BLS keeps track of Census workers for us. Of course I doubt it has a handle on all the lawyers that will be needed to protect those emerging whistleblowers.