Production, employment (production & nonsupervisory), and aggregate hours are all declining, and all down relative to recent peak.
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.
In other news, year-on-year industrial production is now (barely) negative. [1]
A British paper said Elijah was signing subpoenas from his hospital bed. Just press the play button in the middle of the screen after the link jump:
https://www.c-span.org/video/?c4823326/floor-speech
Production, employment (production & nonsupervisory), and aggregate hours are all declining, and all down relative to recent peak.
Must be all the robots people keep talking about.
It might be helpful to look at the whole series: https://fred.stlouisfed.org/series/OUTMS
Yes, there is a downturn, but is it significant? I suspect we’ll see a continuation of that in October with the GM strike, but hard to put that one on Trump.
This index went from less than 89 to over 103 during Obama’s term. Of course, your boy Trump said Obama was terrible for manufacturing and his Administration would make things so much better. Less than 108 and falling is so much better? Please explain this to us old Bruce “no relationship to Robert” Hall!
pgl, I agree. Trump did a terrible job getting manufacturing going between Q4 2014 and Q2 2016 (when the FRED index stood at 102.4). Now, three years later it has plunged to 107.7.
A mere 5% increase is something you celebrate? But the increase under Obama was larger. Oh wait – your eyesight is worse than your analytical abilities so I can see why you can’t grasp the very simple point. Oh wait – you have trouble grasping 2 + 2. Never mind.
Did you forgot to read what our host wrote?
“Production, employment (production & nonsupervisory), and aggregate hours are all declining,”
Menzie is so unfair to Single Statistic Bruce “no relationship to Robert” Hall for going beyond putting a single series on the graph. We are so indebted to you to focus solely on a single series. BTW Bruce – Menzie gets your reading impairments so he has a whole new post reminding you that this thread had the audacity to consider more than a single statistic.
I love it how Bruce Hall cherry picks this series:
https://fred.stlouisfed.org/series/OUTMS
Yea – it was up a bit for a couple of years after Trump took office. Brucie must be Mr. Magoo as he thinks it was falling throughout Obama’s latter years. Let’s see 102.4 as of 2016QII but 105.3 a year later. Now I would not call this a growth miracle at all but by Bruce Hall’s standards it is. Of course he is either too blind to see it or too dishonest to admit it. But then that is how cherry pickers work!
Let’s look carefully at this series in light of what Menzie is implying:
Manufacturing Sector: Real Output (OUTMS)
https://fred.stlouisfed.org/series/OUTMS
Menzie has been speculating whether we will have a 2020 recession. Note we have had 3 recessions since 1987 (when this series starts). In each case, this series fell before the recession. It fell a little before the 1990 recession. It fell before the 2001. Yes – it fell a LOT before the Great Recession. And it has fallen for only the 4th time. Only an utter idiot would ask:
‘Yes, there is a downturn, but is it significant?’
But of course Bruce Hall leads with this incredibly dumb question before his pro-Trump paranoia let him to write
‘I suspect we’ll see a continuation of that in October with the GM strike, but hard to put that one on Trump.’
OK Brucie – we will remember to blame the 2020 recession on Jimmy Carter!
pgl, let’s look at the last six years… three for Obama and three for Trump. https://fred.stlouisfed.org/series/OUTMS
Oh, let’s give Obama the credit for the turnaround in 2016-19. I’m sure there’s logic to that given his performance between 2013-16.
Lord – your stupidity never stops even when your own dog has run away in disgust. Oh well – you couldn’t afford the dog food so that’s a good thing!
That’s a great non-retort from the data-challenged.
“Bruce Hall
October 19, 2019 at 6:03 am
That’s a great non-retort from the data-challenged.”
Let’s be clear here then. You are cherry picking data after accusing others of cherry picking data. Come on Bruce – are you sad that you are not the most incompetent Trump sycophant. Relax – you are catching up with Mulvaney.
Dear Folks,
This is to make a reply to Bruce Hall, which is not necessarily a comfortable thing to do. My thanks for posting the link to the whole series. Yes, it does look significant. It is easy to argue that there was a downturn in 2014-2015, and that didn’t amount to much. But even if we discount for October, the way things are falling does not look promising. This doesn’t mean a recession by itself, since consumption is still going up, and as Barkley Rosser rightly points out, you are getting something from residential investment. But it is worse than the 2016-2017 fluctuations.
Depends on what you look at.
Industrial production is about 5% above its 2012 pre-recession peak.
But manufacturing is about 5% below its 2012 pre-recession peak.
Suspect the difference is that industrial production includes mining ( includes oil) but manufacturing does not.
So you can see the fracking revolution at work
As of now it looks like for the aggregate US economy we are seeing a competition between falling manufacturing output and rising housing starts, although actual housing construction was also apparently down in September. The manufacturing situation probably is mostly due to the slowing global economy plus the aggravation coming from Trump’s stupid trade wars, while the housing permits up may reflect the decline in interest rates since the Fed changed policy from tightening to easing.
So construction workers in New York and California will have lots of jobs while workers in those purple states will suffer. Sounds like a winning strategy for Trump – eh?
“actual housing construction was also apparently down in September”.
I decided to see what FRED had to say about
Real Private Residential Fixed Investment (PRFIC1)
https://fred.stlouisfed.org/series/PRFIC1
A rather significant drop since the end of 2017.
Doesn’t seem to be the same thing I’m reading on housing starts:
https://www.zerohedge.com/economics/housing-starts-permits-plunge-september
A related number which tells a lot about the broad market for housing.
https://www.zerohedge.com/markets/national-average-apartment-rent-drops-1st-time-2-years-us-property-market-sags
I’d make some insulting remarks here, but that’s apparently only under the province of PhDs.
Moses Herzog: If you are implying I am censoring you for insulting comments directed at Barkley Rosser, you would be wrong. I have censored because you have written what I deem inappropriate remarks regarding other individuals and/or bodily related functions.
@ Menzie
“bodily related functions”, now you really have gone too far. (friendly joke)
You’ve been so tolerant of me tip-toeing along the lines of good taste it’s hard for me to complain. I didn’t copy/paste them. I honestly can’t remember how the comment about how AOC had interacted with Mazzucato crossed the line. It’s hard for me to self-filter cuz it’s just not my nature (not online anyway). You know the separate Brainard comment also kind of irked me, because it’s funny how certain parties want to feign outrage over gender titles, but apparently can’t keep track of the policy stances that come out of the mouths of the women they are “defending”. Which shows those women more respect “I wonder”?? That was my intended main goal in the latter Brainard comment on capital requirements. Who else here is carrying her banner on that?? She can’t even get a single FOMC colleague to agree with her on capital requirements (not by vote anyway).
Did you actually read the comment on the top of Tyler Cowen’s blog that I linked?? Does this strike you as the words of a man broad-minded on race, or of one who holds those stances as a personal convenience?? I’m here to tell you Menzie, if that comment on Tyler Cowen’s site had been worded the same way and insert “those Chinese” where it said “those Indians”, I don’t think that would have been digested well by you Menzie, nor should it have been.
I hope you at least wouldn’t begrudge me, I state the truths as I see them, it may cross lines, but I hope you can at least give me I’m pretty straight on here (sometimes to my own detriment, in the name of honesty). I can’t stomach phonies, I can’t. And I can smell them from 10 miles off, even when my nose is not downwind of them.
Menzie, I wanna give you truth serum, inject it in your arm and ask if a man who is the biggest blowhard on this site says (or strongly implies) “I picked Duflo and Banerjee as favorites to win the Nobel” would that blow-hard have not put one single comment about that thought online?? ANYWHERE!?!?!?!?!?!! How does that strike you in the believability department Menzie?? Really?? Are you really gonna tell me that you buy that??
Moses Herzog: You mentioned laxatives in one case. You referred to a “Miss” when it’s not correct and would be considered insulting — particularly when Dr. or Governor would be appropriate.
Actually, Moses, since you seeem to think this matter of speculations about who would get the Nobel are a big deal I did put Duflo and List foward, not Banerjee of Kremer, in several places online. But, sorry, you will not find and of them , and I did say it in classes and seminars, but those are not online. And, again, if you think that capitalizing and bolding words and following them with lots of bolded exclamation points and question marks is going to impress anybody, you are sadly mistaken.
Get something straight, Mosses, you are not the policeman here, and you are certainly not my policeman, having made several utterly false accusations about me, for which you have not apologized but rather attempted to sort of half double down when caught, as for example when you falsely accused me of citing a nonexistent poll in Iowa, about which you went on and on about, but after having it exposed that the poll existed, you then shifted to criticizing the sample size of the poll, although it was not all that small actually, thereby just makking a bigger fool of yourself.
And it is not just Menze who finds all this drivel out of you tiresome. Most just lay low, but I repeat a challenge: find where anybody ever aside from CoRev on that Iowa poll flop has supported you even one iota on any of your many attacks on me. Nobody has. You are out there all by yourself with this pathetic obsession of yours.
I’m assuming Menzie would tell us we should look at the seasonally adjusted numbers. For your viewing pleasure:
https://fred.stlouisfed.org/series/HOUST
It doesn’t look good to me looking outwards. i.e. I would hardly call it “a competition between falling manufacturing output and rising housing starts” That’s laughable at best.
Housing starts are likely to soften this winter and probably are already starting to roll over. That was a interest rate spiked mini-run that is over.
I stand corrected. Was looking at August data. Permits are down slightly in September, but construction down much more.
Also, residential construction has been a drag on GDP with negative growth (should that be “ungrowth”?) in eight of the last ten quarters.
Having agreed with Moses that I was wrong about the August to September changes, I shall note that the general story I told of housing donig much better than manufacturing and likely to do so in the coming months is accurate. This is focused on permits, not starts, which is what I meant to say, but sloppily did not (unilke Moses, I do admit my errors).
So, while permits did decline slightly from August to September, they have risen YOY 8.0 percent. Also, single-family home permits did rise from August to September, reaching their highest level since Feb. 2018.
tradingeconomics.com/united-states/building-permits
Furthermore, commentary supports my argument that permits are high enough to sustain rising housing construction in the coming months, even as manufacturing does not look so good.
marketwatch.com/story/housing-starts-fall-9-september-but-high-permits-low-mortgage-rates-suggest-construction-slowdown-is-temporary-2019-10-77
I don’t think Trump’s trade wars matter that much. Terrible profit margins in Auto,Tech and Mining due to overcapacity and they really haven’t even tried to solve the overcapacity issues yet. I suspect deep cuts by the first quarter of 2020 triggering unemployment to rise, probably around 5%, well above full employment. Corporate debt also falls and corrects back to the long run trend line.
Its a cyclical downturn. The real question for the Fed is how to stop another housing bubble during the 2020’s cycle as millies start heading into their prime household formation years. They flopped big time in the 2000’s.
It’s funny how people now regard manufacturing jobs as “good jobs.” I remember a time when people dreaded a life working in some brain dead manufacturing job. A lifetime of putting the blue bolt in the blue hole and the green bolt in the green hole.
I agree, and yet—-isn’t it often we hold semi-disdain for things which can be easily had or we experience daily, up until the point when those things are gone and only then do we realize…….. With how much more enthusiasm would someone put on their shoes in the morning for a job, after experiencing life for 6 months without that same job??
This also explains the contradiction of coal miners craving a job which destroys their lungs and health precipitously. In those regions, without targeted/strategic government stimulus, the threat of that is ever-present.
“It’s funny how people now regard manufacturing jobs as “good jobs.” I remember a time when people dreaded a life working in some brain dead manufacturing job.”
I’m sure it was dreaded by a white collar worker like you. But for blue collar workers it meant a union job with good pay, good health insurance and good pension. You made enough that you could buy a home, raise a family and send your kids to college to get those coveted white collar jobs. Particularly for African Americans, it was their first step up into the middle class.
Now it’s near minimum wage in an Amazon warehouse with a side gig driving Uber. Those manufacturing jobs still look pretty good.
Too bad the neolib globalists shipped them off to China where they think those manufacturing jobs are pretty good too.
joseph I think “union” is the key word. There was nothing good about pay, health insurance or pensions for non-union workers in the manufacturing sector. As to buying a home, please note that home ownership has been higher over the last 25 years than it was the previous 25 years:
https://fred.stlouisfed.org/series/RHORUSQ156N (data is not seasonally adjusted, but you get the idea).
Don’t be fooled by some romantic and nostalgic dream. We also have much bigger homes than was the case 50 years ago. I’d also point out that today’s increasing home ownership (along with dual income families) has reduced labor mobility, which is one (of many) reasons why non-college educated workers make less than they used to. As to health insurance, 50 years ago it was a lot less expensive than it is today, so employer provided health insurance was an effective way for companies to offer non-taxable benefits. It was a win for employers and employees….but not a win for taxpayers. And the unfortunate legacy of employer based health insurance is one of the biggest obstacles to decent healthcare we face today. It’s why we have Obamacare (at best) rather than Medicare-for-All. And we shouldn’t forget that even though health insurance was relatively cheap, medical science also wasn’t very good.
I agree that pensions were much better (at least for unionized workers), but much of that benefit proved to be illusory when those pensions were raided at just the time many of those post-war blue collar workers started to retire. Unions might have negotiated good pensions, but that’s not the same thing as actually having those pensions available to retirees when they reach age 65.
One thing that makes today’s manufacturing jobs more attractive than past manufacturing jobs is that the work itself tends to be more interesting. There’s a lot less mind-numbing assembly line work and much more high skill labor producing a much better product. People tend to forget the crappy cars that came off a 1960s “Big Three” assembly line. I remember when my dad bought a new 1962 Chevy Impala station wagon and when he opened the globe compartment he found a handful of screws, washers and nuts.
I’m sure it was dreaded by a white collar worker like you.
Indeed it was. I didn’t go to college right out of high school. I chose to work in the “real world” for a couple of years. Not only did I save money (I never needed a college loan or scholarship), but the experience of working in Chicago sewers and non-union sheet metal manufacturing proved to be an excellent motivator. But the main reason people could afford to go to college wasn’t because of their parent’s job in manufacturing; it was because public universities were heavily subsidized by state governments. You didn’t send your kids to college because you had a manufacturing job; you sent your kids to college because books and tuition were affordable even for low income families.
Too bad the neolib globalists shipped them off to China where they think those manufacturing jobs are pretty good too.
I rather think it was abundant capital that went to China, not the jobs. Ever hear of Heckscher-Olin or Stolper-Samuelson?
The respected ISM manufacturing survey indicates a level of 47.1, this is lower than the last industrial recession of 2015-16. The employment figure is in contraction mode. thus, the whole economy will follow it. As Krugman, points out my spending is your income and your spending is my income. thus, the contraction of the manufacturers will spread when they do not consume services.