There is no manufacturing recovery.
Manufacturing Jobs Month-Over-Month Details
- Negative 22 straight months since April 2024
- Weakness started in September of 2023
Year-Over-Year Change in Manufacturing Jobs
Manufacturing jobs have been negative year-over-year for 29 consecutive months dating to September of 2023.
Trump is not to blame for all of this. However, tariffs undoubtedly made matters worse, especially for small- to mid-sized businesses.
Promises Not Delivered
Trump promised a manufacturing revival but did not deliver.
“It is hard to find businesses outside of the AI ecosystem or healthcare that are talking about hiring,” said Richmond Fed President Tom Barkin.
Reuters reports US Factory Headcount Falling Despite Trump’s Promised manufacturing boom
U.S. manufacturing jobs in December continued an eight-month skid that began last spring after President Donald Trump rolled out aggressive import taxes that he pledged would lead to a resurgence of blue-collar jobs by reshuffling world trade to favor U.S. workers.
But the blue-collar jobs boom hasn’t materialized, adding to the soured sentiment about Trump’s economic policies among households concerned about still-rising prices and uncertainty about the labor market.
Just ask J.B. Brown, CEO of BCI Solutions Inc., a small metal foundry in Bremen, Indiana, that sells to a range of agriculture and heavy equipment makers.
“Every time I hear that manufacturing is booming, I scream at the TV,” Brown told Reuters. His workforce is down to 130 from 240 people over the past 27 months. That’s the fewest the family-owned business has had since at least 1993, when he joined the company.
Brown said he eliminated a shift in September 2023 and has let attrition steadily reduce numbers since then. He said he could cut another 5% of his workers, if necessary, but he’s trying to avoid that to keep ready for the eventual upturn in orders. His capacity now stands at 52%, another low point. “I’ve never been below 70 to 65%,” he said. “This is our first time experiencing that.”
The pace of job creation in the first year of Trump’s second term has fallen more than two-thirds from what it was in the final year under President Joe Biden, to an estimated 49,000 per month in 2025 versus 168,000 per month the prior year.
The U.S. Supreme Court is expected to rule soon on a case that challenged the legality of many of the tariffs imposed under national security laws but touted by Trump as a source of revenue and meant to reclaim U.S. manufacturing supremacy.
The path of employment since the new strategy was put in place, however, shows if anything how difficult it is to reshape labor market dynamics in a $30 trillion economy whose population is aging and in need of aging-related services, where growth is dependent on consumer spending that tends to be concentrated on services like education, healthcare, leisure, and restaurants, and whose workers command a wage premium that causes firms and managers to invest in productivity so they can make goods with fewer man-hours.
Manufacturing employment in the U.S. is now lower than it was for much of Trump’s initial term, which ran from 2017 until his loss to Biden in the 2020 election.
Tariffs will not Make American Manufacturing Great Again
The Reuters report is from the December nonfarm payrolls report, which ADP data again confirms.
The San Francisco Fed notes “about 45% of U.S. imports reflect intermediate inputs to the production of American goods, while the remainder corresponds to imports of final consumption goods.“
Since tariffs are a tax on US consumers and businesses, the continued manufacturing weakness has been expected.
Trump is clobbering small manufacturers and businesses while repeating tariff nonsense.
Trump wants to bring manufacturing back to the US, but tariffs cannot and will not do that. All tariffs will do is raise prices and protect select industries at the expense of every other industry.
The end result is a destruction of small business employment while making the US the high cost producer. No good can come from that.
ADP Payrolls Weak Again, Small Employers with 20-49 Employees Hit Hard
Earlier today, I reported ADP Payrolls Weak Again, Small Employers with 20-49 Employees Hit Hard
Businesses with 20-49 employees have negative year-over-year growth for 20 straight months and 24 out of the last 25 months.
Businesses with 50-249 employees have negative year-over-year growth for 13 straight months.
Tariffs are a huge part of those problems. Click on above link for more details.
Related Posts
January 27, 2026: Trump Cheers a Plunge of the US Dollar “I Think It’s Great”
“Look at all the business we are doing,” says Trump.
A plunge in the US dollar makes imports more expensive. That is on top of tariff already destroying many businesses.
January 31, 2026: Competing Claims, How Much Labor Market Weakness Is There?
Some see “No Signs of Labor Market Weakness”. Others strongly disagree.
I am in the strong disagreement camp.
February 2, 2026: The Fed Has Two Huge Problems Starting Now, Acyclical Inflation and Jobs
The Fed is not in a good spot.
Trashing the dollar makes exports cheaper then that will drive up demand. This is simplified economics. This is Trump.
It also makes buying imports much more expensive. Add to that the tariffs to strip money off the citizens.
Bubmblefuck overlooked two realities.
The United States is one of the least reliable countries to do trade. We don’t even know what we’re going to charge ourselves next week. People will not do business with an unstable nut.
In order to be a manufacturing powerhouse one needs to have materiels to work from. Most of this is imported, which you can’t afford unless you can afford the knee pads necessary to get an exemption for your PAC contributions. Small businesses cannot afford the extortion.
Devaluing s has its roots in the Triffin’s Dilemma/Paradox.Stephen Miran ,I hope I have got the name correct,wants a weak $ without allowing other Nations to weaken their Currencies.
Democrats = Republicans = Biden = Trump = Israel NOT USA
10,000 boomers a day retiring = SELLING STOCKS Japan selling US Bonds = carry trade unwinding US debt up a trillion every three months = dollar debasement GOLD SILVER PLATINUM IT’S TOO FAR GONE
Amusing that so many seem to think there is a Trump plan for the economy, incorporating tariffs, AI, Venezuelan oil, European energy needs, Greenland, Gaza, foreign investment, healthcare, lower fed rates, etc. There is no plan, just an endless series of one-off transactions that we may or may not abide by. There is no there there. Like a rubber ball, we start fast in one direction, then slow down or stop or pivot to something completely different in a different direction.
There is no national economic strategy at all, just repeated proclamations of success achieved (‘mission accomplished’) and promises of greater success next year.
Ah, but it’s 5D chess, the MSM only talks about the negatives, Mish has TDS, both sides are just as bad, etc
To you and Quatloo above: first, I’m writing as an Australian, which is why I say “you” and not “we.”
I agree that it sometimes seems as if Trump doesn’t know much about economics, but do remember that the voters don’t know much about economics, and he has to appeal to them. I seem to remember reading somewhere that a politicians needs to be a bit more intelligent than his average voter, but not too much. Not too long ago, we in Australia had a very intelligent Prime Minister, who I knew (or at least met) when we were both in student unionism. He once said as a journalist that Australia had a policy of “speaking loudly and carrying a toothpick.” I commented to someone at the time that he was too intelligent: practically no-one in Australia would know what he was talking about. I knew that he was referring to Theodore Roosevelt’s line that “America should speak softly, but carry a big stick.” I don’t suppose much more than one per cent of Australians would have known about that. Probably less than ten per cent of Americans would get the allusion today. The politician didn’t last long as a politician. He has just published a new history of Australia.
As I understand it, one thing that is a military necessity for a great power today is to keep ahead in high technology and military manufacturing. That was the lesson of your Civil War, and you have remembered it ever since. If you ever forget it, the West will be finished.
I don’t know whether there is any coherent line in Trump’s economics, but it seems to me that his military sense is adequate. During his first term, he refused to start a foolish war with Persia (Iran) because they shot down an expensive drone. All the fools wanted him to start a war so that they could say how reckless he was. He has pretty much settled Venezuela’s hash, and looks like doing the same for Cuba. That will greatly strengthen the U.S. position in the Western Hemisphere, especially bearing in mind that a lot of Latin countries have been voting in more conservative and sensible governments lately. (Only Portuguese-speaking Brazil is a sad case.)
If he could get control of Greenland, that would be even better. You could develop the place, instead of just letting it sleep as the Danes do. You could mine rare earths in places where there wouldn’t be a lot of residents to be hurt by the mine waste. It would be a new frontier.
So I don’t think Trump’s economics is too bad. I assume that he can get advice about theory even if he doesn’t understand it himself. It doesn’t matter how prosperous and happy you try to be, if there are savages coming in the gates, trying to kill you. For us in the Eastern Hemisphere, we are better off with a strong, healthy America, even if it means we have to take more responsibility for our own defense. You can’t fight China for us if you can’t fight anyone.
Psychopath spotted
Wow! You believe in a lot of fantasy. Time to take off those rose coloured glasses and look at reality.
You’re not helping poor stupid me. You need to be a bit more analytical to help in a discussion. And I don’t mean by analyzing my character defects.
I thought we graduated to 6D.
Trump does have a Plan: INTIMIDATION.India has been intimidated into buying US Energy at the cost of Russia.Total buying from US $ 500 BILLION in 4 or 5 years.
Threats are a tactic, not a strategy. There is no coherent theme to these threats, just one-off attempts to cajole others into doing what he wants. Sometimes they are successful, sometimes his bluff is called and he doesn’t follow through (TACO), sometimes he does follow through. That uncertainty does have a benefit, but like a poker player who bluffs all the time, it is not a strategy for long term success.
Any ideas to offer???
Yes, step 1 get rid of Trump, step 2 demand that candidates put forth a coherent economic strategy before voting for them. One could go way beyond that, but nothing can be accomplished until that is done.
The Boomcession: Why Americans Hate What Looks Like an Economic BoomThe models used by policymakers to understand wages, economic growth, and consumer spending are misleading. That’s why corporate America is having a party, and everyone else is mad.
https://www.thebignewsletter.com/p/the-boomcession-why-everyone-but
Mish, I’m surprised you have two posts on the ADP data without noting that ADP also announced it had massively revised all its ‘data’ back over the past decade, like a 2M+ difference.
And in particular, that it had massively revised specific months, in the completely opposite direction than before.
Like the BLS, ADP used algorithms and forecasting smoothing models, to put out its numbers. But unlike the BLS, the ADP has its own original data for a very small and specific subset of employers only
Thanks
I accidentally overlaid my last ADP file. Download files have same name.
However, I have a backup of from November, thus only missing one month.
Looking at this now.
That said, the revisions are based on QCEW
And unlike the BLS they actually did back revise
So unlike the BLS standard data series, historical comparisons are valid.
Finally, based on this, the next BLS revision will also be huge.
Fair enough on the “historical comparisons are valid”…
But revisions out to 10-15 years back? Even if the current revisionist data is more accurate for historical comparison, all those financial and economic analyst reports of monthly ADP changes in the past are still inaccurate (based upon inaccurate data)
Did you realize the BLS did the same thing a year ago
Yes, everyone that follows the BLS and ADP methodology (and not just the data releases) knows and knew.
But I’ve read a lot of comments here (and on other blogs) how bad the BLS is and how good the ADP is. And now we see these massive revisions by ADP as well
Notice the 2 million BLS discrepancy
https://mishtalk.com/economics/nonfarm-payrolls-rise-by-50000-with-76000-in-negative-revisions/
And we have another big revision coming up – annual benchmark revision based off QCEW
Based on the lack of leadership, native intelligence and common sense at the white house, these numbers don’t look as bad.
Reagan said McDonalds “manufactured” hamburgers. The rot goes back at least a half century.
There is NO RECOVERY Anywhere . . . Even with Government Spending . . . America cannot afford its future because the Purchasing of the Dollar will continue to decline as it has for the last 100 years . . . .
Mish,
I keep asking you, but maybe you haven’t seen it, so I’ll try to get in first here and ask you again: isn’t it true that tariff protection can help a large country catch up, because it has a big enough home market? Isn’t it true that that was what the American Civil War was really about? Isn’t it true that Japan succeeded in that way in the earlier part of the twentieth century, and that China did the same thing later? I accept that stealing technology is part of this.
I repeat my complaint that economists leave the military dimension out of their stories.
I have a BIG “Disagree” flag to your “Isn’t it true that that was what the American Civil War was really about? [tariff protection]? Geez, let me ask my black friends.
Here’s a Civil War trivia factoid to keep around as it explains a lot of dynamics:
Who was the ONLY VP to serve under BOTH parties, AS WELL AS serve consecutive terms? John Calhoun. B/e after serving for his original party (GOP), Democrat Jackson had/let him ‘cross the isle’ to try and bridge both side’s Slavery demands. (Zero to do with tariffs.) Of course the Civil War happened anyway the North/South Vs Western expansion slavery issues ran too deep.
“John C. Calhoun is the primary Vice President who served under two different political factions before the Civil War, serving under John Quincy Adams (National Republican/Democratic-Republican) and then Andrew Jackson (Democrat). He was a key figure in transitioning from the era of personal politics to the party system.”
Did your black friends thank the Irishmen coming off the boats in steerage to “join” the Union Army?
Lincoln didn’t invade the South because of slavery. He said so. Congress said so when he called them into session 3 months after invading. The Northern legislatures also said so. They invaded the South to preserve their hegemony [aka “the Union” as if it were something God decreed]. Amicable divorce idea hurt their feelings.
Calhoun didn’t switch parties. The Republican Party which Jefferson founded, and to which Calhoun belonged, split into the Whigs and Jackson’s Democrats [called Democratic Republicans for about a year].
Anyone who thinks war is based on anything but money and power is naive. Lincoln was probably more racist than the plantation owners. Read the Douglas debates to get his opinion of black people.
That is correct, Lincoln’s primary objective was not to end slavery, it was to prevent the Southern states from seceding. In his famous letter to Horace Greeley (NYTribune editor), Lincoln said “My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that.” https://www.abrahamlincolnonline.org/lincoln/speeches/greeley.htm
I do realize that there were sentimental ladies who were really and genuinely concerned about the black slaves. However, I don’t think that in those days sentimental ladies moved politics. Not so long before, men in England were still going into rebellion in support of this or that claimant to the throne – for instance, Monmouth’s rebellion, in which an illegitimate son of Charles II managed to convince some men that his parents had been secretly married, and that this was a good enough reason to overthrow the unpopular James II. (I assume that, there too, there were some genuine grievances involved.)
I am led to believe that Jewish bankers and manufacturing interests inspired the Civil War, for the sake of protecting the growing Northern factory interests and keeping out better (in those days) British goods.
As for Calhoun, my limited reading of American history leads me to believe that he was VERY bad friends with President Andrew Jackson.
I didn’t think the GOP existed in the days of Jackson and Calhoun. My impression was that it was the vehicle created by the Jewish bankers to bring about the Civil War, and that that was the reason for the reluctance of southern conservatives to vote for it, going right up to the time of Jack Kennedy and Lyndon Johnson, if not so much in evidence today.
As Ken Burns says “it’s complicated”.
But other than that (from Wiki) we agree to disagree: “The origins of the American Civil War were rooted in the desire of the Southern states to preserve and expand the institution of slavery.[1] Historians in the 21st century overwhelmingly agree on the centrality of slavery in the conflict, but they disagree on the North’s reasons for refusing to allow the Southern states to secede…”
Wikipedia, seriously? You use that propaganda tool as a serious source? Lincoln’s War was complicated; at least Burns gets that right. The causes don’t fit on a bumper sticker.
The Union admitted West Virginia as a slave state in the middle of the Civil War and the Emancipation Proclamation did not apply to slaves in WV or other Union slave states.
That depends on what industry or company you are talking about.
Take the 50% tariffs on aluminum. This helps US aluminum producers, allowing them to raise prices for their output. Higher prices have allowed them to restart some production that had shut down because it was unprofitable and uncompetitive. The amount restarted is small and it only creates a few jobs.
To create a lot of jobs would require the buildout of many brand new aluminum smelters. But companies are unwilling to commit the capital needed because the smelters will only be competitive if the tariffs stay in place for the next 3 decades and there is no guarantee of that.
Meanwhile, there are many thousands of US manufacturers that use aluminum. They are all now paying much higher prices for the aluminum they need. Which makes them far less competitive. And ends up costing a lot more manufacturing jobs than the small number that are created in the aluminum sector.
The net result of aluminum tariffs is fewer manufacturing jobs overall.
I thought the problem was that aluminum takes so much energy to produce that it you can’t really do it at scale in the US with the current electrical infrastructure in the US. You would need a few more nuclear energy facilities to be built to make it cost effective.
Correct. Aluminum smelting is uncompetitive in the US because our 4 remaining smelters are old and inefficient; but mostly it is because our electricity prices are too high. Which is why most new aluminum smelters are built where electricity is cheap. Like in Quebec, where new smelters sign decades long power deals at 3-4 cents per kwh.
Nope. Nuclear is far too expensive for aluminum smelting. It is one of the highest cost sources of electricity. Cheapest sources are hydro, solar, onshore wind, and natural gas.
Catch up to what?
Is the US an emerging market?
Take steel and aluminum, arguably the two worst tariffs.
What is the US catching up to?
Why?
What’s the threat?
Aluminum is particularly bad because it is the most energy intense. Why not be thrilled with Canadian aluminum produced with cheap hydropower?
No Trump ignorantly wants it produced here. So higher costs for every industry that uses aluminum.
Do we want to catch up to Chinese or Koreans slaving to make underwear or shirts?
Why? For what?
No good can come out of it, just higher prices.
The only thing worth catching up on is Rare Earth Minerals. Why don’t we cooperate with Canada and Mexico instead of turning allies into enemies?
Quickie note on Canadian hydropower. Ever been to Niagara Falls? TONs of water going over every second. Ever run down? NO! Near free and endlessly renewable w/ NO pollution.
Water goes over pretty fast too huh? All this is why up from the falls is one of Canada’s first hydro (“run of river”) projects; starting w dirt cheap power for Toronto. (Guy who built it made enough for Casa Loma – castle.)
Anyway, who cares about tariffs to compete with their mostly free (and green!) power?
Go do some other business!
Mish, thanks for replying. I have learned a few things from this. I imagine that there may be political reasons (and maybe military reasons) for Trump to support local aluminum and ironworks, even if it may be less economically efficient. It does make sense that you (I’m talking as an Australian) should buy them from Canada if that is cheaper.
I have bought some shares in companies that want to produce rare earths in Australia, so I hope you buy some from us. My impression from reading the industry literature is that you will soon be producing more than enough at home. It is the processing that is the bottleneck, not availability of ores.
I assume that if you have successful, profitable manufacturing companies, they experiment and develop more efficient methods and better products, whereas if your manufacturers are barely holding their own against superior foreign competitors, it is the foreign competitors who do the innovating and end up capturing the market, AND that this has military implications.
My suspicion is that if the U.S. dollar goes down to where it deserves to be, you won’t need tariffs any more. Your inflation will be through the roof, your skilled working people will be making a mint, and all your pensioners and superannuants (like me) will be starving.
I understand that in Germany 1919-23, the farmers were the people who did well. They lived so well and went out spending up big at restaurants that some people tried to have laws passed to stop them from showing off.
Reportedly,US scientists have discovered a method to manufacture a wood product stronger than Steel and Aluminum(!), as per dailygalaxy.com or universetoday.com
I see benefits from Trump policy coming from other vectors. Deregulation (or lack of enforcement) will be beneficial for big business. It will not be as much for small businesses as they care more about local regs. I think the push for SMRs will be a big deal but only as much as private companies are not forced to tie into grids. They need to be able to produce their own power so it becomes a competitive force against monopolized utilities. The utility companies will find a way to pocket the savings from SMRs if they can.