“The good news is, today, our businesses have created nearly 7 million new jobs over the past 38 months. Five hundred thousand of those jobs are in manufacturing.”
— President Obama, remarks on college affordability, May 31, 2013
During a speech calling on Congress to halt a hike in the student loan rate, President Obama referenced the creation of 500,000 manufacturing jobs since February 2010 as part of the opening sentence in a paragraph touting good news about the economy (“The housing market is coming back. The stock market has rebounded.”).
But there was something about that phrase that sounded familiar.
Here’s the president speaking to the Democratic National Convention on Sept. 6 (nine months ago):
“After a decade of decline, this country created over half a million manufacturing jobs in the last two and a half years.”
And here’s the president at the State of the Union address on Feb. 12 (four months ago):
“After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three.”
It’s pretty rare to hear the same talking point regarding a job statistic, month after month. What’s going on here?
According to Bureau of Labor Statistics data, the low point in U.S. manufacturing was reached on February 2010, when there were just 11.46 million manufacturing jobs in the country. That was about 1.1 million fewer than when Obama took office — and nearly 2.3 million fewer than when the Great Recession officially began in December 2007.
Then manufacturing jobs began to rebound, thanks in part to the rescue of the auto industry. By July 2012, the number of manufacturing jobs had risen to 11.957 million, or just shy of a 500,000 job gain. That’s when it became part of the president’s campaign rhetoric.
But at that point, the number also stopping climbing and instead began bouncing around.
In August 2012, 14,000 manufacturing jobs were lost. In the next month, an additional 18,000 were lost. Then came several months of gains — followed by three months of losses. The preliminary numbers in the employment report released Friday show a loss of 9,000 manufacturing jobs in April and 8,000 in May.
So, here we are, nearly one year later, and the United States is still stuck at a gain of 500,000 jobs.
More striking, rather than month-by-month figures, look at the trend when year-to-year calculations are made:
Gain in manufacturing jobs
Jan. 2012 to Jan. 2013: +124,000
Feb. 2012 to Feb. 2013: +118,000
March 2012 to March 2013: +74,000
April 2012 to April 2013: +55,000
May 2012 to May 2013: +41,000
In other words, it’s a downhill trend — headed possibly to zero.
Alan Tonelson, research fellow at the U.S. Business and Industry Council, notes that the manufacturing share of nonfarm employment is now actually lower than in February of 2010, because manufacturing has added jobs less than one-third as fast of the rest of the nonfarm economy. “No one doubts that U.S.-based manufacturing has experienced a very steep rebound from a deep recession,” he said, but “it has slowed to a crawl over the last year or so.”
White House officials insist the 500,000 figure is still a good news story. “This is something that is very different than what we saw in the last recovery,” one official said. “We are adding jobs now where we were losing jobs then.” But he conceded, “It is probably not going as fast as it should.”
The official noted that the manufacturing workweek is now about an hour longer than historical averages, and that hundreds of thousands of jobs would be created if the workweek simply returns to normal.
The White House also provided the following statement:
“Any discussion about recent manufacturing job performance must begin by acknowledging where we came from. During the previous decade, the manufacturing sector lost over 5 million manufacturing jobs – 3.4 million jobs in the seven years before the recession and another 2 million jobs during the recession. However, since February 2010, U.S. manufacturing has added 507,000 new jobs. Over this period, manufacturing added on average 13,000 new jobs per month. Since May 2012, manufacturing has continued to add jobs at a pace that – prior to this Administration – was not seen since the 1990s, with an average of 3,000 new jobs per month for a total of 41,000 new manufacturing jobs. More broadly, a wide range of outside analysts agree that the U.S. has become a more competitive location for production as a result of factors like increasing U.S. productivity, rising wages abroad, abundant and low-cost domestic energy, and the increased understanding of ‘hidden costs’ from far-reaching supply chains. Given the benefits to the overall economy from a strong and growing manufacturing sector, the President believes we should be taking steps to encourage manufacturing production, investment, and jobs in the U.S.”
The Pinocchio Test
While the president has long preferred to point to the gain in jobs since early 2010 — the low point in employment during his presidency — the fact remains that manufacturing employment remains about 600,000 jobs smaller than when he took office. That stands in stark contrast to overall nonfarm employment — which is 2 million jobs larger.
Moreover, the growth in manufacturing jobs has basically stalled over the past year. The president’s continued use of this 500,000-job statistic, even as other job stats keep improving, suggests the news is not as good as advertised. Without some presidential acknowledgment that manufacturing job growth has slowed in the past year, it might be time to retire this talking point.
Check out our candidate Pinocchio Tracker