“American manufacturing is growing at the fastest pace since the 1990s.”
— President Obama, remarks at the Daimler Detroit Diesel Plant, Dec. 10. 2012
The presidential campaign may be over, but President Obama has kept up a pace of campaign-style speeches to build support for his push to raise taxes on the wealthy.
On Monday, he reached back to the campaign to cite one of his favorite statistics. Sounds great, but it is missing some context. Let’s explain.
In January, the White House issued a report touting the private-sector jobs record since the depths reached in early 2010. The report noted: “Over the past two years, the economy has added 334,000 manufacturing jobs — the strongest two-year period of manufacturing job growth since the late 1990s.”
Manufacturing jobs have continued to grow since then, adding almost 500,000 manufacturing jobs since January of 2010, according to the Bureau of Labor Statistics. The pace of job growth, however, has begun to slow a bit this year.
Moreover, manufacturing jobs are still significantly lower than when Obama took office in early 2009 — down between 432,000 and 600,000 jobs, depending on whether you start counting in January or February.
In other words, manufacturing jobs are on an upward pace mainly because they fell so quickly in the depths of the Great Recession. That downturn started in December of 2007, toward the end of George W. Bush’s term — and the total number of manufacturing jobs lost since then is nearly 2 million.
Manufacturing jobs were already on a steep slide through much of the 2000s, so the number of manufacturing jobs is down 5.7 million since the late 1990s.
The grimmest statistic is this: The last time the total number of manufacturing jobs was this low — 11.95 million — was in May of 1941, before the United States entered World War II. The U.S. population then was 133 million, compared to about 315 million today.
UPDATE: An astute reader points out that manufacturing employment peaked in July and has actually started to decline in the past few months. We should not get too excited about a few months of data, especially since two months are still preliminary. Still, though year to year employment is still up--which is what we had initially looked at--this recent decline could be a worrisome signal. Moreover, the reader noted that Federal Reserve data shows that inflation-adjusted manufacturing output peaked in February and has also begun to decline.
The Pinocchio Test
We understand that the president wants to tell a good news story to factory workers. But, when seen in context, his statistic is a bit too rosy for the state of American manufacturing. (Update: The new information above suggests the president is really using stale talking points and we might have been too generous with Two Pinocchios.)
Check out our candidate Pinocchio Tracker
VIDEO:During a visit to Detroit's Diesel Corp. on Monday, President Obama warned of tax hikes if Congress does not reach a "fiscal cliff" agreement in the next two weeks.