Wednesday, January 29, 2014

Our Manufacturing Employment Boom Bubble

The following chart shows the annual change in manufacturing employees. I'm using semiannual data to filter out some of the noise.

Click to enlarge.

How can people be optimistic about the future of long-term employment when looking at that chart? Is it because they are looking at the following chart instead (and cherry picking just the good stuff)?

Cherry Picked Goodness

1. The growth rate is still positive! Hurray!
2. It's different this time! Woohoo!
3. Thanks to the Fed, recessions are now impossible!
4. We've lost more than 5 million manufacturing jobs since 2000. 12 million to go.

Can't you see that we're being Khan'd?

He is intelligent, but not experienced. His pattern indicates two-dimensional thinking. - Spock, The Wrath of Khan (1982)

One-dimensional thinking: The growth rate is still positive.
Two-dimensional thinking: The growth rate is positive but slowing.
Three-dimensional thinking: Somethin's poppin' and it ain't popcorn.

This is not investment advice. As always, just opinions.

Source Data:
St. Louis Fed: Manufacturing Employment Growth
St. Louis Fed: All Employees: Manufacturing


Stagflationary Mark said...

Can manufacturing growth turn up from here? Sure, anything is possible.

Will manufacturing growth turn up from here? In my opinion, probably not.

Stagflationary Mark said...

Can the optimists really believe that the Great Recession caused the long-term trend in manufacturing employment to reverse?

If that's true, then we should have a Great Recession every other year. Just think of all the prosperity that would generate!

Forehead. Desk. Whack. Whack. Whack.