Wednesday, February 13, 2013

On the rebound?

Over at Slate, Matt asks if the "manufacturing rebound" actually happening. He shows a graph of manufacturing employment, reproduced here:


(click the pic for an even more Perk-esque image).

However if we look at output instead of employment, the picture is quite different:


(clic the pic for an even more Chamberlin-ian image)

The amount of stuff we manufacture has recovered in a V like pattern, without adding very many employees. Since the end of the recession, it looks like around a 17% increase in output but only around a 4% increase in employment. Notice that in the last downturn both series fell substantially (17% fall in employment, 19% fall in output) so it's probably not a labor hoarding story that explains the jobless recovery in manufacturing).

So what is manufacturing? The products or the jobs?


3 comments:

Simon Spero said...

Manufacturing: Multifactor Productivity (MFGPROD) is interesting. Not sure what it's saying, but interesting.

http://research.stlouisfed.org/fredgraph.png?g=fyq

J Scheppers said...

Do the employment numbers include all the programmers and other capital asset producers that are behind the machines?

c5d868aa-76df-11e2-8d2c-000bcdcb471e said...

Well, if you believe in the broken window fallacy, as Yglesias and his ilk almost certainly do, then the economy grows by employment, without reference to the actual production of goods and services. If, however, you're not an economic ignoramus, then manufacturing's strength is measured in the amount of goods and services it's producing.