U.S. Manufacturing is Officially in a Recession, Will it Continue?


U.S. manufacturing is officially in a recession, after output shrank over two consecutive quarters this year.

The Los Angeles Times reported that “after adding nearly half a million jobs in the prior two years, which Trump frequently stressed in hard-hat rallies throughout the Midwest, manufacturing employment has stalled.”

Layoff announcements have replaced job growth this year, particularly in manufacturing-heavy states like Pennsylvania and Michigan. These states only makes up about 10 percent of the country’s economic activity, but are very important political states in the next election. If production continues to slowdown, then the issues in manufacturing has the potential to drag into other industries as well.

“The faltering industrial sector has started to crimp businesses in the transportation and warehousing sectors,” The Times noted. “And there are growing worries of spillover effects in the larger services sector and broader economy.”

Trump’s first two years in office showed a boost for U.S. manufacturing, during which time about half a million new jobs were added. But analysts and business leaders point to use of tariffs and colateral effects from the trade wars with China and other countries as a reason for the dip in the last two quaters.

Although it seems progress has been made recently between the US and China many fear that tensions will rise again between now and election time, meaning “little relief on tariffs and continued uncertainty for businesses, which will keep manufacturing limping along.”

Analyst seem to think the the recession will continue, but are optimistic that some formalized agreement could be reached after Trump meets with China next month. If it does it could be exactly whats needed to pull US manufacturing out of it current state.

Read the full report.


Economics, Finance and Investing