US manufacturing employment has reached its highest levels since George W. Bush’s presidency. However, the sector’s growth has slowed this year and lags behind the overall labor market. This presents a mixed picture for President Joe Biden, who is counting on a manufacturing rebound to strengthen the economy and boost his chances in the 2024 presidential election.
Since Biden took office, manufacturing employment in the US has grown by nearly 800,000 positions, contributing to the creation of over 13 million jobs as the economy recovered from the pandemic. Last month, the number of employed individuals in the US manufacturing sector reached its highest monthly tally since late 2008. However, the 6.5% job growth in manufacturing under Biden is slower compared to the overall employment increase of about 9.3% across other sectors since January 2021.
Although the economy has seen the creation of 1.2 million jobs since January of this year, manufacturing jobs have remained largely unchanged. The Biden administration and many economists believe that manufacturing employment will be supported by the passage of three legislation pieces aimed at boosting government support for domestic infrastructure, semiconductor production, and clean energy development. These policies are expected to provide a tailwind for the manufacturing sector in the near term and beyond.
While manufacturing employment has been growing, the distribution of job gains shows that the largest increases have occurred in western and southern states, where job growth is naturally faster. This contrasts with traditional rustbelt manufacturing hubs in the Midwest and Great Lakes regions. States like Nevada, Arizona, and Georgia, where there has been significant political activity, have benefited the most from manufacturing growth.
In conservative areas, Biden has been challenging Republican lawmakers who take credit for new industrial projects while criticizing the administration’s subsidies. The manufacturing boom, however, is not evenly spread. Employment growth has been higher in the durable goods sector, which includes long-lasting products used repeatedly, compared to the nondurable goods sector. The transportation industry, particularly motor vehicles, has experienced significant job growth.
On the other hand, the petroleum and coal industry has had flat employment, while furniture and textile manufacturing jobs have slightly decreased. There are concerns that the manufacturing resurgence could be short-lived if the US economy struggles under the weight of the Federal Reserve’s monetary tightening campaign and rising inflation.
While manufacturing activity has started to decline, economists remain optimistic due to the support provided by the Biden administration. Policy support and private sector investments are expected to drive manufacturing growth, regardless of challenges in certain areas. Construction spending for manufacturing facilities has seen a significant increase, particularly in computer, electronics, and electrical manufacturing.
While there are expectations of slower growth, economists like Mark Zandi believe that the manufacturing sector is in a better position entering an economic downturn compared to previous times. This suggests that a recession may be avoided, and the manufacturing sector is on a more stable and long-term foundation.
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