Could Manufacturing and Construction Jobs Be the Economy’s Achilles’ Heel? | Global News Avenue

The job market has been pretty good lately, unless you’re in manufacturing — which could be a bad sign for the economy’s trajectory.

Despite an expansion in the overall labor market, U.S. manufacturing jobs have begun to dry up over the past year. In November, there were 12.9 million people in the manufacturing industry, down from 13 million in January 2024. Other measures of conditions at U.S. factories, such as the Institute for Supply Management’s survey of purchasing managers, have been negative for months.

Although the employment decline was only half a percentage point, the trend was significant enough that at least one economist viewed it as a warning sign about the overall health of the economy. combine Real estate market strugglesThe decline suggests construction employment may also be facing difficulties.

The broader job market has continued to add jobs over the past year, but economists at Pantheon Macroeconomics noted in commentary that declines in manufacturing and construction jobs tend to precede recessions.

“We think The economy is more fragile than the market, and critics appreciate that.”

Why are manufacturing and homebuilding industries struggling? Economists point to the Fed’s policy of keeping the federal funds rate at a two-decade high for more than a year through September. Another economist said that while the central bank has since lowered interest rates, it may not be enough to get manufacturing employment back on track.

“Steady growth in demand, not seen in more than two years, will be needed to help stabilize manufacturing employment,” wrote Matthew Martin, senior U.S. economist at Oxford Economics.