(What’s Left of) Our Economy: U.S. Real Wage Decline is Really Widespread

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CCP Virus, child care, coronavirus, COVID 19, elder care, health care, inflation adjusted wages, labor shortages, nursing, real wages, supply chain, trucking, wages, warehousing, workers, Wuhan virus, {What's Left of) Our Economy

A Facebook exchange I was involved in last night prompted me to check the U.S. government data to find out how widespread was the trend of falling real wages – and by definition falling living standards. And the answer is: incredibly widespread – including in supply chain-related sectors where crippling labor shortages are often blamed for much of the bottleneck problem that has helped fuel inflation by reducing the supply of goods sought by Americans.

The exchange began when a Facebook friend posted her view that the U.S. economy was doing far better than gloomy press reports indicated. I countered with my “putting people first” argument that falling living standards meant that the economy was failing in its fundamental mission: improving Americans’ material lives. My interlocutor responded by claiming that the unusually large number of unfilled job openings have appeared during the stop-and-start recovery from the brief but steep CCP Virus-induced downturn showed that many Americans falling behind economically could easily improve their lot by taking jobs in higher paying industries.

I could have answered by pointing out how many Americans in low-paying jobs in particular lack the training to move that wage ladder. But I was more struck by the pervasiveness of the recent decline in inflation-adjusted hourly pay – which shows that even those able to make that transition will find themselves on a downward moving escalator for the time being.

Specifically, I looked at price-adjusted wage trends on a November, 2020-November, 2021 basis for the eight broadest categories tracked by the Bureau of Labo Statistics (BLS). They are: mining and logging; construction; manufacturing; trade, transportation and utilities; information services; professional and business services; leisure and hospitality; and miscellaneous services.

How many of these eight sectors saw real wage declines between the two Novembers? Seven. Leisure and hospitality was the lone exception, and it’s the lowest paying of these categories by far. The constant dollar wage out-performance there was indeed encouraging, but with these hourly earnings still only standing at $6.88 in 1982-84 dollars – versus $11.13 for the private sector as a whole – I wouldn’t claim economic success just yet.

(As known by RealityChek regulars, BLS doesn’t monitor wages in the public sector because there, pay is determined mainly by politicians’ decisions, not economic fundamentals.)

The names of these eight sectors, however, make clear that they’re so broad that they could include subsectors where the story’s very different. And that’s true even for a number of what might be called pandemic-specific sectors with lots of job openings – but only sometimes.

For example, the enormous national healthcare sector is part of the business and professional services grouping, where real hourly wages of $13.44 – higher than the private sector average – are off by a little over one percent so far this year. But for healthcare alone, they’re up by just under one percent (to a lower $12.13, though).

Dig deeper, and you find that after-inflation wages for hospitals, nursing care facilities, elder care facilities, and child care services, have risen, too. But except for hospital workers (a broad, relatively high paying category itself), hourly wages in 1982-84 dollars in none of these sectors is anywhere close to even a measly $10. And none has seen year-on-year wage increases of more than 1.95 percent (for hospital workers).

The wage situation is even worse in many of the supply chain-related industries within the trade, transportation, and utilities super-sector. For example, next time you hear about a dire nation-wide shortage of truck drivers, keep in mind that their real wages have decreased by 3.67 percent annually as of November. And workers at those equally strained warehouses? They’re only off by 0.25 percent. But they’re supposed to be desperate to hire! What gives?

The most obvious answer to me is that a supposed labor shortage in a sector where real wages are decreasing is really a tale of inadequate pay. But that’s a subject for another post – or six. For today, though, it seems abundantly clear that the headline real wage decline number isn’t masking lots of workers gaining ground, and that if you view that standard as the main test of an economy’s success, America’s is definitely flunking.

Following Up: National Radio China Interview Podcast Now On-Line

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CBS Eye on the World with John Batchelor, China, decoupling, finance, Following Up, Gordon G. Chang, investment, John Batchelor, logistics, supply chain, tariffs, Trade, tradewar, transport, Wall Street

True to my word, I’m pleased to announce that the podcast is now on-line of my appearance last night on John Batchelor’s nationally syndicated radio show. Click here for a terrific discussion among John, co-host Gordon G. Chang, and me on how successfully Washington has – or hasn’t – been decoupling its economy from that of an increasingly hostile and powerful rival.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Making News: Back on National Radio on China Trade, Beijing’s Wall Street Funders…& More!

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CBS Eye on the World with John Batchelor, China, finance, Gordon G. Chang, investment, logistics, Making News, supply chain, tariffs, Trade, tradewar, transport, Wall Street

I’m pleased to announce that I’m scheduled to return to John Batchelor’s nationally syndicated radio show tonight. In fact, I’m especially pleased to announce this because for a change I have enough notice to give RealityChek readers a heads up!

The conversation – which will include co-host Gordon G. Chang – will cover headline subjects like whether U.S. tariffs on China are still working, why Wall Street has been channeling ever more enormous amounts of capital from abroad in China’s state-controlled economy, and where the global supply chain crisis stands.

As usual, I don’t know when exactly the segment will air, but John’s show is on nightly from 9 AM to I PM, and you can listen live at this link. P.S. John’s other interviews are likely to be must-listening, too. Further, if you can’t tune in, I’ll be posting a link to the podcast as soon as one’s available.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

(What’s Left of) Our Economy: The Case for Transitory U.S. Inflation Just Weakened

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CCP Virus, consumer price index, core inflation, coronavirus, COVID 19, CPI, inflation, Labor Department, lockdowns, logistics, prices, reopening, stay-at-home, supply chain, transportation, Wuhan virus, {What's Left of) Our Economy

At first glance, this morning’s U.S. inflation report almost had me throwing in the towel in the debate between those (like me) believing that recent price hikes will peter out sooner rather than later, and those believing that they’ll be much longer lasting.

My pessimism stemmed from the indisputable facts not only that by all the major month-on-month and year-on-year measures, the numbers for October were terrible in their own right. They also showed inflation gaining momentum. My case for optimism focused on a loss of momentum I’d identified through September.

Today’s statistics definitely shifted the weight of the evidence in favor of the pessimists. But I still see one possible reason for continued optimism – though the accent is on “possible.” Specifically, the year-on-year numbers may again be partly functions of unusually weak inflation last year, when the CCP Virus pandemic was undermining the economy even more than this year.

Let’s review the main monthly and annual numbers for this calendar year first, though, because it’s worth seeing just how bad they are and how much inflation momentum they reveal. First, the monthly results for overall inflation (as measured by the Labor Department’s Consumer Price Index, or CPI). As you can see, whereas sequential price increases between July and September had been coming in considerably lower than their June peak, in October they shot up past the June peak – to the highest level since June, 2008 (1.05 percent).

Dec-Jan:                          0.26 percent

Jan-Feb:                          0.35 percent

Feb-March:                     0.62 percent

March-April:                  0.77 percent

April-May:                     0.64 percent

May-June:                      0.90 percent

June-July:                      0.47 percent

July-Aug:                      0.27 percent

Aug-Sept:                      0.41 percent

Sept.-Oct:                      0.94 percent

The recent acceleration in the monthly changes in so-called core inflation was even stronger. (This gauge strips out food and energy prices, because however vital these commodities are to daily life, their price levels can be influenced by developments like bad weather or the decisions of the OPEC oil-producing countries’ cartel that supposedly say little about how fundamentally inflation-prone the economy is or isn’t.)

As of October, core inflation is still well below its peak in early spring. But it’s much highe than it’s been in the last three months:

Dec-Jan:                      0.03 percent

Jan-Feb:                       0.10 percent

Feb-March:                  0.34 percent

March-April:                0.92 percent

April-May:                   0.74 percent

May-June:                    0.88 percent

June-July:                     0.33 percent

July-Aug:                     0.10 percent

Aug-Sept:                    0.24 percent

Sept-Oct:                     0.60 percent

The case for acceleration is at least as strong for annual overall inflation. As I wrote last month, the rate of change had been more or less plateauing since May, but clearly shifted into a higher gear in October. Indeed, last month’s yearly increase was the biggest since December, 1990’s increase of 6.25 percent.

Jan:                             1.37 percent

Feb:                            1.68 percent

March:                       2.64 percent

April:                         4.15 percent

May:                          4.93 percent

June:                          5.32 percent

July:                           5.28 percent

Aug:                           5.20 percent

Sept:                          5.38 percent

Oct:                            6.24 percent

The same speed-up can be seen in the annual core inflation figures. And they’ve just hit their highest level since September, 1991 (4.60 percent).

Jan:                            1.40 percent

Feb:                            1.28 percent

March:                       1.65 percent

April:                         2.96 percent

May:                          3.80 percent

June:                          4.45 percent

July:                          4.24 percent

Aug:                          3.98 percent

Sept:                          4.04 percent

Oct:                           4.58 percent

But now the data providing (some) cause for optimism. They cover the annual inflation figures for 2019-2020, and the reason for examining them is that if inflation that year was unusually low, then whatever price hikes are recorded the year after will be unusually – and to some extent, artificially – high.

As clear from the below numbers, those 2019-2020 inflation rates became rock bottom as the CCP Virus began spreading, the economy began locking down, and consumers turned super cautious. From June through September, they rose again as the reopening after that first virus wave proceeded. But numbers like those, with one handles, hadn’t been seen recently since the summer of 2017, and even these were all well above 1.50 percent.

But October saw a sizable dropoff – from 1.41 percent to 1.19 percent.

Jan:                            2.47 percent

Feb:                            2.31 percent

March:                       1.51 percent

April:                         0.34 percent

May:                          0.22 percent

June:                          0.73 percent

July:                          1.05 percent

Aug:                          1.32 percent

Sept:                         1.41 percent

Oct:                          1.19 percent

And possibly as interesting: The November, 2019-2020 overall inflation rate (below) was even lower. December’s was higher, but not by much. So I’d argue that caution is warranted in reading too much into the latest big annual CPI increase.

Nov:                          1.14 percent

Dec:                           1.30 percent

The story told by the core inflation data is similar. Annual price hikes below two percent didn’t reappear until March, 2018 and stayed above that level until the depths of last year’s short but steep pandemic-induced recession. Following that first wave and its dramatic impact, annual 2019-2020 core inflation rates came back, but never approached two percent. And in October, fell back to 1.63 percent.

Jan:                           2.26 percent

Feb:                          2.36 percent

March:                      2.10 percent

April:                        1.44 percent

May:                         1.24 percent

June:                         1.20 percent

July:                         1.56 percent

Aug:                         1.70 percent

Sept:                        1.72 percent

Oct:                          1.63 percent

How did they perform through the end of 2020? Cumulatively, they drifted down further.

Nov: 1.65 percent

Dec: 1.61 percent

In this vein, it will be especially interesting to see how the annual 2021-2022 statistics look when they begin coming in early next year. My bet right now is that they’ll decline simply because this particular CCP Virus effect will be wearing off. And hopefully, progress toward untangling knotted global supply chains will help moderate the monthly numbers. (Until then, though, the holiday shopping season could well keep propping them up.) But if those logistics and transport troubles remain serious, all bets come off. Ditto for energy prices if they stay up.

None of this is to minimize the pain that recent and current inflation have inflicted on Americans, and especially lower income Americans. And the October results suggest that even if these price hikes prove to be a transitory development due largely to one-off CCP Virus-related disruptions, there’s no doubt that the definition of “transitory” keeps expanding chronologically – and possibly making this debate look pretty moot.

Our So-Called Foreign Policy: U.S. Tech Dependence on Taiwan is Even Worse Than You Think

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China, defense, defense manufacturing, electronics, Eric Lee, national security, Our So-Called Foreign Policy, semiconductors, supply chain, Taiwan, Taiwan Semiconductor Manufacturing Company, tech, The Diplomat

As known by RealityChek regulars, I’m really worried about the threat of a Chinese takeover (militarily or political) of Taiwan. That’s overwhelmingly because the island is home to the world’s leader in producing cutting-edge computer chips (Taiwan Semiconductor Manufacturing Company, or TSMC), and these devices will be the brains of future cutting-edge militaty systems and thus vital to U.S. national security as far into the future as anyone can see.

Sure, U.S.-owned companies like Qualcomm, Apple, and Nvidia still design lots of the world’s most advanced semiconductors. But they don’t produce them, and if you can’t manufacture these items (and no U.S.-owned firms can achieve this goal either at their domestic or foreign factories), you have nothing to actually stick into your missile defenses and jet fighters and radar arrays and communications networks.

It turns out, however, that I didn’t know the half of it about Taiwan’s electronics industry and America’s safety and independence vis-a-vis China. As made clear in this report today in The Diplomat, these Taiwanese companies – all located thousands of miles from the United States but only 100 miles from the People’s Republic – are major players in a wide range of both semiconductors and related electronics components that are used in advanced weapons and military systems right now, and that are certain to be keys to their successors.

Even concerning products for which the Pentagon has done a reasonable job helping to maintain adequate U.S.-based output, Chinese control of Taiwan would result in Chinese access to Taiwanese counterparts that are at least as effective – and whose manufacturers in fact perform some of the production for some of the American-owned firms concerned.

Just as bad: “Reasonable job” is a good description of Washington’s performance in terms of ensuring enough manufacturing of these sophisticated electronics during peacetime. But as Diplomat author Eric Lee observes, war-time or the run-up to a conflict could be a different story altogether. Therefore, the reliance on Taiwanese output for any needed surge production a potentially “vulnerable chokepoint for American forces.”

Nor is the situation likely to improve anytime soon, even if Congress does get off its duff and finally pass an acceptable version of legislation aimed at incentivizing much more advanced semiconductor manufacturing at home. For the necessary factories (known as “fabs”) cost billions of dollars and take years to construct. Indeed, as Lee notes, their price tag for one that’s state-of-the-art is about the same as for one of America’s biggest aircraft carriers. Further, as he points out, however much the U.S. government may be willing to provide semiconductor makers with subsidies of various kinds, TSMC by itself will be spending much more. So it’s likely to remain superior in the production of the most powerful chips.

Lee advances an intriguing idea for at least improving the situation – creating a “U.S.-Taiwan Senior Level Steering Group for Supply Chain Security and Defense Industrial Cooperation.” Its mission: more closely coordinating and integrate U.S. and Taiwan defense and technology sectors in order to jointly develop and produce the defense systems of the future and their most valuable components.

At the same time, this step would create its own risks. For China views Taiwan not simply as an asset it would very much like to possess. It’s seen as a renegade province that must be bought back under Beijing’s rule, not according to any particular schedule to be sure, but by force if necessary. That’s largely why the United States has shied away from officially recognizing the island as an independent country, let alone forming an alliance. As a result, how could the cooperative venture Lee proposes be formed without establishing such a relationship? And even if Washington threaded this needle in its own mind, would the Chinese recognize view the difference as meaningful, and simply accept the new status quo? Or would they conclude that a red line had been crossed and attack?

No one can outside Chinese leadership circles can say for sure. And maybe El Supremo Xi Jinping doesn’t yet know himself. What is completely clear, though, is that U.S. failure to maintain leadership in one of the most important industries of the future yet developed has left Washington – and the American public whose interests it’s supposed to safeguard – with only lousy and dangerous policy alternatives, and slightly less lousy and dangerous altenatives.

P.S. In the interests of full disclosure, you should be aware that I hold a not-trivial long position in TSMC stock. And thanks to friend and electronics manufacturing specialist Chris Peters for flagging this Diplomat article for me.

Making News: New National Radio Podcast on the Supply Chain Crisis and Decoupling from China

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CBS Eye on the World with John Batchelor, China, decoupling, Gordon G. Chang, John Batchelor, Making News, supply chain, Trade, West Coast ports, Western Hemisphere

I’m pleased to announce that I retuned to John Batchelor’s nationally syndicated radio show last night. Click here for a link to the podcast, in which John, Gordon G. Chang, and I shed light on the national and global supply chain crises and what they’re saying about how connected the U.S. economy is from China nowadays, how connected it should be – and how to break away.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Making News: Back on National Radio on the Supply Chain Mess — & More!

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Cato Institute, decoupling, economists, globalization, Gordon G. Chang, Immigration, IndustryToday.com, Jeremy Beck, manufacturing, Mark A. Milley, Market Wrap with Moe Ansari, NumbersUSA, supply chain, Ted Galen Carpenter, TheHill.com, Trade, wages

I’m pleased to announce several new recent media appearances.

Yesterday, I returned to the nationally syndicated “Market Wrap with Moe” to talk about those supply chain snags that are roiling the entire economy and pushing up prices, and about whether we’ve seen peak U.S. domestic manufacturing at least for now. Visit this link and click on the play button under “Current Market Wrap” to listen to the podcast.  My segment starts at about the 21:30 mark.  

In his Tuesday op-ed for TheHill.com, Gordon G. Chang quoted my views on whether or not the world economy is going to resume globalizing and generally coming together economically, or keep de-globalizing. You can read the article here.

Also on Tuesday, IndustryToday.com re-posted (with permission!) my RealityChek report on how the new Federal Reserve industrial production figures indicate that, at least for the time being, domestic manufacturers have succumbed to recent CCP Virus-related and other obstacles to growth. Here’s the link.

On September 30, Jeremy Beck of the immigration realist organization NumbersUSA posted an item on the group’s website that took off from a prior offering of mine to spotlight the intellectual fakery of many mainsteam economists on the subject of mass immigration’s impact on the wages of U.S. workers. Click here to see that the situation is even worse than I thought.

Finally, on September 28, a post by the Cato Institute’s Ted Galen Carpenter (full disclosure: a close personal friend) used some of my arguments on China phone calls made by U.S. Army General Mark A. Milley, President Biden’s top uniformed military adviser, to explain why they should worry the heck out of all Americans. Click here to read.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Following Up: Podcast of National Radio Interview on Biden China Policy & Supply Chain Chaos Now On-Line

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Biden administration, CBS Eye on the World with John Batchelor, China, Following Up, logistics, shortages, supply chain, tariffs, Trade, trade war, transportation

I’m pleased to announce that the podcast of my interview last night on the nationally syndicated “CBS Eye on the World” with John Batchelor is now on-line.

Click here for a timely discussion of the state of the Biden administration’s China trade policy, and the outlook for untangling the CCP Virus-related global supply chain bottlenecks causing shortages and transport delays throughout the U.S. and world economies – and threatening to leave many holiday gifts undelivered.

I’m still hoping that a podcast will be posted of my segment yesterday morning on WAKR-AM’s (Akron, Ohio) “Ray Horner Morning Show,” but haven’t yet seen a recording of our discussion of those same topics. If one does go on-line, I’ll let everyone know ASAP.

And keep checking in with RealityChek for news of upcoming media appearances and other developments

(What’s Left of) Our Economy: U.S. Inflation Still Looks Transitory No Matter How You Look at It

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CCP Virus, consumer price index, coronavirus, COVID 19, CPI, Fed, Federal Reserve, inflation, Jerome Powell, PCE, personal consumption expenditures index, supply chain, transitory, Wuhan virus, {What's Left of) Our Economy

I’m still in the “U.S. inflation is transitory” camp and still not overly worried about recent price increases because they look to be products of the CCP Virus and the sudden stop-start pattern is produced in the economy and not stronger, more lasting changes. But it’s important to note that my arguments have been based on only one of two major groups of official statistics – the consumer price index (CPI) kept by the Labor Department. (See, e.g., here.) 

The continuing growth of inflation worries among economists and the public indicates that this is a good time to look at that other data set – the personal consumption expenditures (PCE) price index tracked by the Commerce Department. Another good reason: This is the inflation measure preferred by the Federal Reserve, one of whose two main missions is preventing hot inflation (the other being maintaining employment), and of course this central bank’s monetary policy decisions are central to the nation’s success at keeping prices under control.

My bottom line: The PCE figures seem to support the transitory viewpoint as well.  The Fed believes this, too. But many other serious students of the economy, as indicated above, have taken exactly the opposite interpretation of the latest PCE results, so let’s try and identify what’s troubling them, and in the process, see how they differ from their CPI counterparts.

A big part of the answer comes from these side-by-side comparisons. The table below shows how both gauges have measured month-to-month price increases this year so far (through August) in percentage terms.

                          CPI                          PCE

Jan.                    0.3                            0.3

Feb.                   0.4                            0.3

March               0.6                             0.6

April                 0.8                             0.6

May                  0.6                             0.5

June                  0.9                             0.5

July                  0.5                              0.4

August             0.3                              0.4

Interestingly, although the PCE changes are steadier, they show that, at least on a monthly basis, inflation’s momentum displays no signs of speed-up – which matters greatly because inflation is a problem that can so easily feed on itself (as expectations of ongoing price increases spur businesses and consumers to increase their purchases more, boosting demand and thus pushing prices yet higher). In fact, the PCE numbers reveal deceleration, too on this basis.

Also worth stipulating: both these inflation measures include food and energy prices, which often have little to do with the economy’s underlying inflation prone-ness (but which certainly do impact price changes overall). And as known by anyone who’s gassed up a vehicle lately, energy prices in particular have been surging recently.

But inflation watchers also look closely – often more closely – at year-on-year price increases, and that makes sense because data over longer timeframes is less susceptible to random or otherswise misleading fluctuations than data over shorter timeframes. So here are those year-on-year results for both inflation indices in percentage terms for the first eight months of this year:

                          CPI                          PCE

Jan.                    1.4                            1.4

Feb.                   1.7                            1.6

March               2.6                             2.5

April                 4.2                             3.6

May                  4.9                             4.0

June                  5.3                             4.0

July                  5.3                              4.2

August             5.6                              4.3

These numbers clearly are the cause of the inflation concerns, as they do show not only strong but accelerating momentum.

But they don’t show it conclusively or, in my view, in any way that undermines the transitory school of thought. And the reason is that inflation was so low in pandemic-dominated 2020 that a combination of mean reversion and virus-induced supply chain disruptions and consequent shortages was bound to generate higher than normal price increases.

This table makes the point, by showing how low the yearly inflation increases in percentage terms were for the bulk of last year, and especially during the early spring, when the economy fell into a deep (but short) recession.

                          CPI                          PCE

Jan.                    2.5                            1.9

Feb.                   2.3                            1.8

March               2.6                             1.3

April                 0.3                             0.5

May                  0.2                             0.5

June                  0.7                             0.9

July                  1.0                             1.1

August             1.5                             1.4

It’s still possible to argue that, however low 2019-2020 inflation became, it quickened to some extent starting in June (according to both measure). And because the 2020-2021 results also show increasing post-June momentum, inflation is still worsening.

My rejoinder – the post-June inflationary momentum this year so far is much slower than last year’s. Between June and August, 2019, for the PCE, the yearly inflation rate increased by 55.56 percent (from 0.9 percent to 1.4 percent). Between this June and August, that increase was just 7.5 percent (from four to 4.3 percent).  For the CPI, you can see that this difference was even bigger.

Moreover, even this year’s modest post-June inflation speed-up has only lasted for two months.

But don’t think for a minute that the inflation news is all good. Principally, even the optimistic Fed now believes that the transitory developments that have pushed inflation higher this year will last longer than it had been expecting. Just last week, Chair Jerome Powell said it was “frustrating to see the bottlenecks and supply chain problems not getting better — in fact at the margins apparently getting a little bit worse. We see that continuing into next year probably, and holding up inflation longer than we had thought.”

In other words, “transitory” may be pretty long-lasting, and the longer it lasts, the more pressure the Fed will face to cool the economy off faster, probably slowing job creation and wage increases, whether it holds to its diagnosis or not.

(What’s Left of) Our Economy: U.S. Manufacturing’s Now Defying Hurricanes and Delta

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aircraft, aircraft parts, appliances, Boeing, CCP Virus, chemicals, computer and electronics products, coronavirus, COVID 19, Delta variant, electrical equipment, fabricated metal products, facemasks, Federal Reserve, furniture, Hurricane Ida, inflation-adjusted growth, machinery, manufacturing, masks, medical devices, medicines, oil refining, paper, personal protective equipment, petrochemicals, pharmaceuticals, plastics, PPE, real output, semiconductor shortage, supply chain, travel, ventilators, Wuhan virus, {What's Left of) Our Economy

Domestic manufacturing’s done it again. Just as with the Labor Department’s August jobs report, the Federal Reserve’s new release on manufacturing output for the month shows that industry kept dodging whatever potholes the CCP Virus and its highly infectious Delta variant keep digging for the rest of the U.S. economy.

America-based manufacturers’ inflation-adjusted production grew by a meager 0.11 percent sequentially in August. But output was held down by facility closures forced by Hurricane Ida in the petrochemicals, plastics resins, and petroleum refining sectors. Overall revisions were mixed, but some upgrades and downgrades in individual major industries were pretty remarkable, as will be seen below.

The biggest winners in the new price-adjusted manufacturing production report were the small, catch-all “other manufacturing” category (2.42 percent); furniture and related products (up 2.07 percent); computer and electronics products (whose 1.21 percent output rise may have been a response to the worldwide shortage of semiconductors); paper (up 1.07 percent); and fabricated metal products (up 0.74 percent).

The biggest losers were electrical equipment, appliances, and components (down 1.16 percent); textiles products (down 0.81 percent on month); machinery (down 0.80 percent); and the big chemicals sector (down 0.49 percent).

Normally, the machinery results would be discouraging, since its products are used so widely both in the rest of manufacturing and also in big non-manufacturing industries like agriculture and construction. But its August dip followed a July jump of 3.31 percent – its best production improvement since January’s 4.63 percent – which was dramatically upgraded from the previously reported 1.91 percent.

The electrical equipment category followed a similar pattern. Its July real production results were revised all the way up from 2.31 percent to 3.95 percent – its best such performance since January, 2010, when the economy was still in its early bounce-back from the Great Recession that followed the global financial crisis.

Also enjoying a solid August were two narrower manufacturing categories that remain in the news due to the ongoing effects of the CCP Virus. Air travel has of course suffered throughout the pandemic-era, and aerospace manufacturing giant Boeing has been hit with numerous related manufacturing and safety problems (including some pre-dating the pandemic, like the grounding of the popular 737 Max jetliner).

Yet aircraft and parts production in constant dollars advanced by 0.34 percent in August, and in another major revision, July’s previously reported 2.78 percent increase is now pegged at 4.10 percent – its best such result since January’s 6.79 percent burst. And June’s downgraded 3.57 percent rise was bumped back up to 3.84 percent. As a result, aircraft and parts production is now 12.63 percent higher in after-inflation terms than in February, 2020 – the last full data month before the virus began significantly affecting the U.S. economy.

The pharmaceuticals and medicines sector (which includes vaccines) saw a real month-to-month production increase of 0.89 percent in August, and revisions were modest and mixed. These results left inflation-adjusted output 12.33 percent higher than its immediate pre-pandemic levels.

But August real production sank sequentially by 1.73 percent in the vital medical equipment and supplies sector – which includes virus-fighting items like face masks, protective gowns, and ventilators.

On the brighter side, July’s initially reported 1.71 percent constant dollar production rise was revised up to 2.42 percent. June’s dramatically downgraded 1.54 percent decrease was upgraded to a 0.13 percent drop, and May’s upwardly revised 1.86 percent real growth was downgraded only slightly – to 1.78 percent. Even so, on a price-adjusted basis, this crucial industry is just 2.66 percent larger than before the CCP Virus arrived in force.

Domestic industry still faces important headwinds of course – and not just from the possibility that Delta keeps worsening America’s public health and economy, and that approaching winter weather triggers a new wave of infections, hospitalizations, deaths, and restrictions. Those global supply chain snags are still with us, too.

But throughout the pandemic era, U.S.-based manufacturers have overcome obstacles just like this, and their consistent vigor indicates that it’s the pessimists about their future prospectswho now face the biggest burden of proof.