However much of a pain it is for us data geeks to slog through monthly U.S. jobs reports incorporating multi-year revisions, President Trump, his supporters, and everyone rooting for the domestic manufacturing sector (which should be everyone) should be grateful for the latest such exercise.
For the results show that the economy’s manufacturing job creation record under his administration has been better on the whole even than previously believed. Moreover, that conclusion also is justified for manufacturing employment since the President’s tariff-heavy trade policies began in earnest (in April, 2018, the first full month when the global duties on imports of steel and aluminum were in effect).
Not that this morning’s release from the Bureau of Labor Statistics came up all roses for Trump-World and U.S.-based industry. Manufacturing lost 12,000 net jobs sequentially in January – the worst such total since October’s 41,000 (when payrolls were dragged down by the strike at General Motors). Ignoring that anomalous figure, the January manufacturing jobs shrinkage was the worst monthly decline since August, 2016’s 21,000 nosedive.
Moreover, the year-on-year gain of 26,000 was the weakest since the 17,000 annual improvement in February, 2017 (the President’s first full month in office).
But check out the revisions, and the record during the Trump years improves in some key respects – especially compared with that compiled under his predecessor, Barack Obama. The table below shows how the revisions change the picture between the two administrations – an issue bound to matter greatly during the current presidential campaign. They begin with 2015 (the first year for which the totals were updated) and proceed through last month. The figures for the post-Trump tariffs period and the Trump administration’s tenure stop in January (because that’s when the effects of the benchmark revisions stop. The left-hand column shows the pre-revision results and the right-hand column the new. All figures are seasonally adjusted (the statistics most closely followed by economists):
Old manufacturing job change New change
2015: +30K +70K
2016: -45K -6K
2017: +196K +185K
2018: +284K +264K
2019: +46K +58K
final 34 Obama months: +270K +259K
first 34 Trump months*: +478K +479K
since tariffs* +197K +231K
21 months before: +320K +253K
*thru December, 2019
To me, the most important comparisons involve those between the two administrations, and those between the pre- and post-tariff periods of Mr. Trump’s presidency.
The Obama and Trump figures show how manufacturing employment changed during their periods in office closest together in the current (expansionary business) cycle – the comparison that yields the best apples-to-apples results. The Obama period ends with January, 2017 (the former President’s last – near-full month in office and the Trump period begins with February, 2017 (his first full month in office).
And as made clear above, the growth in manufacturing payrolls was a bit weaker during the Obama period than previously reported, and the growth during the Trump period ever-so-slightly stronger.
As for the impact of Mr. Trump’s tariffs, although these numbers don’t isolate the industry sectors likely to be most seriously affected (especially the metals-using industries – which I’ll examine shortly), the results are instructive in particular for the China duties’ effects, since they’re so widely, if unevenly, spread throughout domestic manufacturing.
Since the Trump tariffs’ advent, 21 revised data months passed through December, 2019, so the best comparison is that with the 21 months preceding them. And interestingly, the revisions show that although manufacturing’s hiring pace indeed has slowed since the first full tariff month, they’ve slowed much less markedly (by 8.70 percent rather than 38.44 percent). And that means that manufacturing employment has improved more since the tariff era began than previously thought (by 231,000 instead of 197,000).
Manufacturing trends won’t be working in Mr. Trump’s favor politically this year unless its recent weakness (which may not technically have been a recession) ends – especially on the hiring front. Sure , he could in theory blame the troubles of Boeing and its safety-related woes, which could last many months more. But voters are unlikely to be interested.
Economically speaking, however, the President can legitimately contend that, contrary to endless predictions, American industry and indeed the entire nation are weathering the trade conflict with China in particular just fine – and claim that the modest costs have been well worth the strategic goal of checking the economic and technological progress of this dangerous dictatorship.