Once again, Heritage\u2019s EJ Antoni<\/a> speaks (on Fox) about a manufacturing recession, focusing on employment. I\u2019ll just point out that, according to the most relevant indicator, the manufacturing sector hasn\u2019t been in a downturn for two years.<\/p>\n True, employment and hours are down. So is the Fed\u2019s manufacturing production index. On the latter, note that this is a gross value index. And as for employment and hours, well, employment and hours have been dropping for a long<\/em> time, because\u2026productivity!<\/p>\n Figure 1:<\/strong> Manufacturing employment (production and nonsupervisory) (blue), hours (green), production (tan), and value added in Ch.2017$ (red), all in logs, 2022M10=0. Source: BLS and Federal Reserve via FRED, and BEA, and author\u2019s calculations.<\/em><\/p>\n So\u2026if you focus on GDP as a measure of aggregate economic activity (as EJ Antoni does<\/a>), you should be looking at value added as the relevant metric for manufacturing (since GDP is conceptually the sum of value added).<\/p>\n Speaking of productivity, it\u2019s interesting to consider what happened in the wake of the imposition of tariffs on Chinese imports.<\/p>\n![\"\"](\"https:\/\/econbrowser.com\/wp-content\/uploads\/2025\/01\/mfg_recession.png\")
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