What is the real state of US manufacturing as we approach the mid-point of 2016?
As with most of the rest of the economy, there are both positive and negative signs.
That is captured in the chart below, published last week by the Wall Street Journal, that looks at the US manufacturing sector from a number of angles.
Source: Wall Street Journal
As can be seen, each dollar of growth in manufacturing expands the economy more so than any other sector, as manufacturers spend money on materials, components, supplies, services, etc.
But by one measure, US manufacturing is struggling, with the US trade deficit in goods (manufacutured items) with the rest of the world at nearly $800 in 2015, again approaching all-time records seen in 2006-2008. Not shown, but the US trade deficit in goods with China did set yet another record in 2015, at $367 billion, or almost 50% of the total goods deficit.
Eight years after the Great Recession, US manufacturing output is still below 2008 levels, even though it has climbed a long way back from recent the low point in 2009.
That same story but even a little worse in terms of manufacturing jobs in the US. At about 12.3 million and rising very slowly in recent years, that figure is still down about 1.5 million jobs from 2007 levels - and far below the 16 million manufacturing jobs the US had in 2000.
So is the cup half full or half empty? Take your pick. Obviously, a recession any time soon will again push down all of these recent gains.
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