Last Friday, the Federal Reserve came out with revised figures for industrial production going back to 2012, and the results show that President Trump faces a bigger challenge in making American manufacturing great again than even he might have thought.
According to the new data, inflation-adjusted U.S. domestic manufacturing output is further from having regained its pre-recession high than previously estimated. Before the revision was released, as of the latest available (February) figures, American industry was still 2.83 percent smaller in price-adjusted terms than at the recession’s December, 2007 onset. Now, the shortfall since that peak more than nine years ago is judged to be 3.78 percent.
As a result, U.S. after-inflation manufacturing production today is still slightly lower than it was in August, 2006 – more than ten years ago.
The Fed’s new numbers also yield new figures for domestic manufacturing’s annual performance in recent years. Here are the pre-revision Fed estimates of real manufacturing output changes in recent years:
2014: +2.30 percent
2015: +1.20 percent
2016: +0.40 percent
Here are the revised real manufacturing output changes:
2014: +1.80 percent
2015: -0.50 percent
2016: +0.50 percent
The new Fed data also present the performance of manufacturing’s durable goods and non-durable goods sectors in new lights.
According to the pre-revision figures, real durable goods output in February, 2017 had climbed to 2.72 percent higher than its pre-recession peak in December, 2007. Now that increase is pegged at only 0.63 percent. Non-durable goods real output was previously thought to be 9.40 percent below its pre-recession peak (reached in July, 2007). Now the shortfall is judged to be slightly smaller – 9.17 percent.
The best news in the new Fed data concerned upward revisions for this year’s constant-dollar U.S. manufacturing output. The January figure – already upwardly revised to 0.54 percent on month – is now estimated at 0.59 percent. February’s initially reported 0.51 percent seqential improvement was upgraded to 0.54 percent. These are still the best back-to-back monthly gains since February and March, 2014 – but those increases have been revised, too (from 0.70 percent to 1.11 percent, and from 1.07 percent to 0.80 percent, respectively).
Even better, those 2014 rises in part reflected a manufacturing bounceback from an unusually harsh winter.