Wednesday, April 17, 2013

Manufacturing Output and Manufacturing Employment. Never shall the two meet again...See graphs here...

Mark Perry at AEI (Carpe Diem) has this graph showing the state of manufacturing in the US to date.  Specifically, Industrial Production of Durable Goods and Motor Vehicles and Parts. 

He puts the scale in an index form.  Look at the line labeled "100" and move straight across.  Manufacturing OUTPUT is back to pre-recession levels.  Nice! However, what has this done for EMPLOYMENT in the manufacturing sector?  See the next graph below.

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Source: Carpe Diem

The lines are colored coded to represent the same industries in both graphs.  The employment graph is scaled in "thousands or persons", so add 3 zeroes to the numbers you see below.

Employment pre and post recession has not made the same gains as output.  The question of the day is WHY do you think that is so?  It is getting better, but the separation between output and employment continues.   Look at the time period between the last recession in 2001-2002 and the one we just went through.  What do you notice? Is employment in this sector EVER going to return to that level? The problem is not as easy to identify as it is portrayed in the media and by politicians. 

FRED Graph
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