Analysis: Trump’s 2020 bid may stumble on rust belt manufacturing recession

Analysis: Trump’s 2020 bid may stumble on rust belt manufacturing recession

US president Donald Trump has been boasting about creating manufacturing jobs in states key to his re-election, but an emerging recession in the sector threatens to reverse that trend and imperil his message.

A decline in manufacturing jobs in coming months could hurt Mr Trump in rust belt swing states such as Michigan, Ohio and Pennsylvania and could give Democrats a weapon against the president.

Mr Trump travelled to Pennsylvania, this week, to make his case.

“Factory floors across this land are once more crackling with life. Our steel mills are fired up and blazing bright. The assembly lines are roaring,” he told workers at a Royal Dutch Shell plant in Monaca, northwest of Pittsburgh.

However, Mr Trump faces US manufacturing output declining in consecutive quarters, the common definition of recession within the industry, the result of global weakness and a trade war between the US and China.

New figures show China’s economy stumbled more sharply than expected in July, with industrial output growth cooling to a more than 17-year low, as the intensifying US trade war took a heavier toll on businesses and consumers.

Chinese industrial output growth slowed markedly to 4.8% in July from a year earlier, data from the country’s National Bureau of Statistics showed, lower than forecasts and the weakest pace since February 2002.

So far, job growth has helped Mr Trump make his case.

Payrolls in manufacturing totalled about 12.9 million workers in July, the most since November 2008, according to US Bureau of Labour Statistics data. Since Mr Trump took office in 2017, factory employment has increased by about a half million workers after stagnating in the prior two years.

However, hiring momentum in the sector has started to fade. In the six months to July, 38,000 jobs have been added at factories, the fewest for a similar period since January 2017, when Mr Trump took office.

Mr Trump campaigned in 2016 on revamping trade deals to revive America’s industrial base which was a strategy that helped him pick off the historically Democratic states of Michigan, Pennsylvania and Wisconsin that Hillary Clinton took for granted. Democrats carried those three states in every election from 1992 to 2012 and they will likely need them to win in 2020.

Nationally, manufacturing jobs accounted for 11.9% of employment in counties Mr Trump carried in 2016 compared with 6.7% in counties Ms Clinton carried. In Pennsylvania, Michigan and Wisconsin, manufacturing’s share of employment averaged 17.9% in Trump counties versus 8.5% in Clinton counties, according to analysis.

The benefit Trump derives from the story in his campaign will depend on what happens with jobs if output continues to decline.

The Federal Reserve’s latest industrial production report last month showed US factory output declined at a 2.2% annualised pace in the second quarter after a 1.9% rate of decline in the previous three months.

Within specific industry groups, metals, machinery, textiles, paper and petroleum and coal were among those that experienced outright production downturns during both quarters.

Another gauge of US manufacturing activity fell in July to an almost three-year low, dragged down by slower production and shaky export markets that help explain the Federal Reserve’s decision to reduce interest rates last month.

While manufacturing makes up only about 11% of the US economy, the risk is that further weakness will extend to service providers and prompt those companies to reduce investment and limit hiring.

- Bloomberg and Reuters

More on this topic

Donald Trump told Greenland ‘not for sale’Donald Trump told Greenland ‘not for sale’

Donald Trump floats idea of buying Greenland for the US, report saysDonald Trump floats idea of buying Greenland for the US, report says

You have to vote for me: Trump says US success depends on second termYou have to vote for me: Trump says US success depends on second term

Gaslighting: from partners to politicians – how to avoid becoming a victimGaslighting: from partners to politicians – how to avoid becoming a victim

More in this Section

Ted Baker dumps Debenhams for Next in childrenswear collaborationTed Baker dumps Debenhams for Next in childrenswear collaboration

Harland and Wolff administrators provide extra time to explore rescue optionsHarland and Wolff administrators provide extra time to explore rescue options

Cathay Pacific boss resigns after staff take part in Hong Kong protestsCathay Pacific boss resigns after staff take part in Hong Kong protests

Carraig Donn to create 40 jobs in Co MayoCarraig Donn to create 40 jobs in Co Mayo


Lifestyle

Italy is a volatile place as you probably know, not just the passions of its people but is a place of active volcanos and frequent earthquakes. One of the most devastating earthquakes in recent years was the one that struck the Amatrice region in 2016.Wine with Leslie Williams: Some tasty Italian selections

It’s confirmed, being a dog owner is good for you. Esther McCarthy spoke to four celebrities about pride in their pooches.Animal magnetism: Celebrities and their treasured pets

We recently began watching a new sitcom called, ‘The Kids Are Alright’. It follows an American family in the early seventies as they raise eight sons.Lindsay Woods: I’m a dormant individual by nature but my children are adrenaline junkies

Rosscarbery antiques fair offers plenty of variety, writes Des O’Sullivan.See the value of rare notes and diamonds

More From The Irish Examiner