Here’s a picture of manufacturing activity: employment, hours worked, production, and new orders:

Figure 1: Total employment in manufacturing (blue), manufacturing production (black), aggregate hours worked in manufacturing (production and non-supervisory workers) (green), real new orders 3 month centered moving average (red), all in logs 2021M11=0. New orders deflated by core PPI for finished goods. Source: BLS, Federal Reserve via FRED, BLS, Census via FRED. 

Employment and hours growth might seem pretty anemic given the boom in the economy — but it’s important to remember that trend decline in the two series is 1.2% and 1.4% respectively since 2000.

The short term outlook is improving, even though the manufacturing sector is still shrinking, according to the September PMI (reading = 49).

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