{"id":261390,"date":"2024-10-01T19:52:48","date_gmt":"2024-10-01T19:52:48","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2024\/10\/01\/manufacturing-in-recession-revisited-econbrowser\/"},"modified":"2025-06-25T17:11:02","modified_gmt":"2025-06-25T17:11:02","slug":"manufacturing-in-recession-revisited-econbrowser","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2024\/10\/01\/manufacturing-in-recession-revisited-econbrowser\/","title":{"rendered":"Manufacturing in Recession? (Revisited) | Econbrowser"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<p>High frequency indicators (PMI, etc.) suggest \u2014 and have suggested \u2014 a slowdown in manufacturing. Still, other indicators indicate sideways trending. Here\u2019s a picture, incorporating the just-available manufacturing value added for Q2, as well employment incorporating the preliminary benchmark revision.<\/p>\n<p><a href=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_short3b.png\"><img fetchpriority=\"high\" fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-54035\" src=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_short3b.png\" alt=\"\" width=\"849\" height=\"561\" srcset=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_short3b.png 849w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_short3b-300x198.png 300w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_short3b-768x507.png 768w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_short3b-624x412.png 624w\" sizes=\"(max-width: 849px) 100vw, 849px\"\/><\/a><\/p>\n<p><em><strong>Figure 1:<\/strong>\u00a0Manufacturing production (blue, left scale), implied employment from preliminary benchmark (tan, left scale), aggregate hours (green, left scale), and real valued added (red), all in logs, 2021M07=0, and capacity utilization in manufacturing, in % (black, right scale). Source: BLS via FRED, Federal Reserve,\u00a0<a href=\"https:\/\/www.bls.gov\/web\/empsit\/cesprelbmk.htm\">BLS<\/a>, BEA via FRED, NBER.\u00a0<\/em><\/p>\n<p>I do wonder a little about extrapolations from manufacturing to the rest of the economy. While manufacturing might be a leading indicator (that\u2019s dubious), it\u2019s been declining share of overall economic activity for <em>decades<\/em>.<\/p>\n<p><a href=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_gdp_shares.png\"><img decoding=\"async\" class=\"alignnone size-full wp-image-54036\" src=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_gdp_shares.png\" alt=\"\" width=\"1036\" height=\"576\" srcset=\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_gdp_shares.png 1036w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_gdp_shares-300x167.png 300w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_gdp_shares-1024x569.png 1024w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_gdp_shares-768x427.png 768w, https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/mfg_gdp_shares-624x347.png 624w\" sizes=\"(max-width: 1036px) 100vw, 1036px\"\/><\/a><\/p>\n<p><em><strong>Figure 2:<\/strong> Log ratio of real manufacturing value added to GDP (blue, left scale), and manufacturing to GDP share (tan, right scale). NBER defined peak-to-trough recession dates shaded gray. Orange shading denotes Trump administration. Source: BEA 2024Q2 release\/annual update, NBER, and author\u2019s calculations.\u00a0<\/em><\/p>\n<p>In fact, manufacturing sector value added declined substantially in the wake Trump trade war (even before the pandemic). So, we should be interested in manufacturing to the extent that it\u2019s a large share of the economy (about 10% in value added terms). However, the manufacturing sector could be in recession (however a sectoral recession is defined) without the rest of the economy suffering one (as defined by NBER).<\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<\/p><\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/econbrowser.com\/archives\/2024\/10\/manufacturing-in-recession-revisited\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] High frequency indicators (PMI, etc.) suggest \u2014 and have suggested \u2014 a slowdown in manufacturing. Still, other indicators indicate sideways trending. Here\u2019s a picture,<\/p>\n","protected":false},"author":1,"featured_media":261391,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[155],"tags":[],"_links":{"self":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/261390"}],"collection":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/comments?post=261390"}],"version-history":[{"count":0,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/posts\/261390\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media\/261391"}],"wp:attachment":[{"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/media?parent=261390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/categories?post=261390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/michigandigitalnews.com\/index.php\/wp-json\/wp\/v2\/tags?post=261390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}