Manufacturing is having its best employment year in almost 15 years.
On the heels of a disappointing jobs report, Austan Goolsbee, chairman of the Council of Economic Advisers for President Barack Obama, shined the best light he could on the administration’s economic record during the June 5, 2011, edition of ABC’s This Week with Christiane Amanpour. Two days before his appearance, the government announced that the economy had created a net of only 54,000 jobs in May -- a number well below expectations, and also below the number of jobs created in the previous few months. Amanpour pressed Goolsbee on the issue: "What would you do to get this off the slow burner?" she asked. Goolsbee responded, "Well, I would say two or three things. The first is, the president has never stopped talking about jobs. For him, the growth strategy is the No. 1 issue. Now, we must live within our means. We have a moment that we can talk about long-run deficit reduction. And the vice president's leading an effort to do that, that the president has asked him to. But the president is getting up every day -- on Friday, he's going out to Ohio to talk about jobs in manufacturing, (and) manufacturing is having its best employment year in almost 15 years." We thought we’d check whether Goolsbee was right about manufacturing employment. We turned to the Bureau of Labor Statistics, the government’s official source for employment numbers. There are two ways to look at the issue. One is to look at manufacturing jobs for the first five months of the year over the past decade and a half. The other is to look at the full-year totals for manufacturing jobs, which means determining the total for 2011 by extrapolating a full year from the first five months’ data. First, we’ll look at the January-to-May figures. For 2011, the manufacturing sector has gained 76,000 jobs. To find gains that robust, you have to go back to 1994, when manufacturing gained 107,000 jobs from January to May. So by this standard, it’s 17 years, and Goolsbee actually understates his point. Now the full-year figures. For 2011, manufacturing jobs -- if they continue at their current pace -- would increase by 182,000. That’s the most for any year going back to 1997, when 288,000 jobs were created over the full year. And that was 14 years ago, which fits Goolsbee’s statement of "almost 15 years." At this point, we should note three bits of context. First, despite the gains for the year, manufacturing jobs fell by 5,000 during the previous month, as Amanpour pointed out in the interview. (Goolsbee countered that durable goods manufacturing jobs went up, and they did, by 8,000. Durable goods are those designed to last for multiple years, such as cars and dishwashers.) Second, despite the recent gains, over the past decade and a half, the manufacturing sector has shrunk -- consistently and inexorably. Since January 1994, the manufacturing sector has shed 5,160,000 jobs, leaving today’s number of manufacturing jobs 31 percent lower than it was at the start of 1994. And the actual shrinkage is even more stark than this statistic shows. Since January 1994, the labor force has grown by 18 percent. That means that simply maintaining its share of American employment would have required the manufacturing sector to increase by almost one-fifth since 1994, when in fact it declined by nearly one-third. The continual slide means that when you look at figures for the past decade and a half, most periods have shown a net loss of jobs. Since 1994, manufacturing jobs only showed a net increase six times for the January-to-May period, and only five times for the full-year period. In other words, it didn’t take much for the manufacturing job gains under Obama to stand out. On the other hand, it also means that the administration has some justification for citing the accomplishment. Third, manufacturing jobs have increased for two years running (and two January-to-May periods running) -- but the combined gains haven’t come close to canceling out the manufacturing jobs lost during Obama’s first year in office. In 2009, the economy lost more than 1.1 million manufacturing jobs. Counting the projection for 2011, the manufacturing sector will have rebounded by the end of this year by only 282,000 jobs, replacing only about a quarter of those lost since the start of 2009. While Obama isn’t solely to blame for this hemorrhaging -- the recession did start under his predecessor, George W. Bush -- this does make the overall assessment of the sector under Obama more downbeat than Goolsbee indicated on the show. On balance, we feel that Goolsbee’s decision to highlight manufacturing jobs may be aimed at downplaying the otherwise disappointing jobs numbers for May, but his facts are mostly on target, though he didn't provide the context of the large manufacturing job losses in 2009. Since assigning responsibility for the 2009 losses is a complicated business, we’ll lower Goolsbee just one notch and rate his statement Mostly True.
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