Aurelia Butler

US manufacturing employment has hit its highest levels since George W Bush’s presidency, but its growth has slowed significantly this year and continues to lag behind the rest of the labour market.The data on industrial jobs presents a mixed picture for President Joe Biden, who is banking on a manufacturing rebound to sustain the economy and boost his prospects in the 2024 presidential election. Since Biden took office, US manufacturing employment has grown by slightly less than 800,000 positions, contributing to the more than 13mn jobs created as the country’s economy bounced back quickly from the pandemic. Last month, close to 13mn were employed in the US manufacturing sector, which is the highest monthly tally since late 2008. However, the 6.5 per cent job growth in manufacturing under Biden is still slower than the overall increase in employment since January 2021, of about 9.3 per cent — as other sectors have experienced a more rapid rebound. While nearly 1.2mn jobs have been created since January this year across the economy, there has been virtually no change in manufacturing jobs.

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Biden administration officials — and many economists — believe manufacturing employment will be buoyed by the passage of three pieces of legislation worth hundreds of billions of dollars to boost government support for domestic infrastructure, semiconductor production, and clean energy development. “Policy has really been an increasingly powerful tailwind to the manufacturing base,” said Mark Zandi, chief economist at Moody’s Analytics, saying it will help the sector both in the near term given the tight monetary policy and beyond. “It is arguably among the most rate sensitive and cyclical parts of the economy and yet it’s weathering the storm here very very well,” Zandi said.Biden has been promoting his economic plans as a way of boosting the fortunes of middle class households in towns and communities that have been falling behind in recent years. But a state-by-state breakdown of industrial employment gains shows the biggest increases have occurred in western and southern states where job growth is generally fastest anyway, compared to traditional rustbelt manufacturing hubs in the Midwest and Great Lakes regions. Some of the biggest beneficiaries are still politically significant: Nevada, Arizona and Georgia are key swing states where Democrats have recently performed strongly. “All of a sudden manufacturing has come on stage,” said Tom Harris, a professor of economics at the University of Nevada, Reno, pointing to the fact clean energy-related production was spreading in a state that is mostly reliant on hospitality and gaming.

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In areas that are deeply conservative, Biden has been needling Republican lawmakers who have been taking credit for plant openings and new industrial projects while criticising the administration’s subsidies. “One of the biggest [new solar investments] is in Dalton, Georgia. You may find it hard to believe, but that’s Marjorie Taylor Greene’s district,” Biden said this week, referring to the firebrand conservative lawmaker. “I’ll be there for the groundbreaking.” The manufacturing boom is not being felt uniformly, however.On an aggregate level, employment growth across the durable goods sector, which includes products that do not wear out easily, can be used repeatedly and typically have a shelf life of at least three years, have exceeded that for the nondurable goods sector. Employment has grown 7.2 per cent in the former category since the start of the Biden administration, compared to 5.3 per cent for the latter group. And since June of last year, all of the growth in manufacturing jobs has originated from the durable goods sector, with employment gains flat for the nondurable-related products.The transportation industry has emerged as a clear bright spot. Nearly 200,000 jobs have been added in the past three years, representing a roughly 12 per cent jump. The bulk of that has stemmed from motor vehicles. Food-related manufacturing and those tied to other machinery have had about 90,000 new jobs respectively in that same period.

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Lagging behind is the petroleum and coal industry, where employment is flat. Furniture and textile manufacturing jobs have dipped slightly. There are also concerns the manufacturing resurgence could be cut short should the US economy buckle under the weight of the Federal Reserve’s historic monetary tightening campaign as it battles stubbornly high inflation. The world’s largest economy has proven resilient in the face of rapidly rising borrowing costs, but the fear is it will start to weaken as the year progresses and ultimately result in higher unemployment.Manufacturing activity has started to ebb. According to David Rosenberg, chief economist and president of Rosenberg Research, the latest data from the Institute for Supply Management this week confirmed a “recession in the industrial sector”.

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However, other economists are more optimistic about the outlook in light of the support provided by the Biden administration. “Historically, these manufacturing industries are more interest-rate sensitive than services sector industries, but I think there is enough going on with policy support and private sector investments that will be [supportive] regardless of what is going on in these areas,” said Adam Hersh, senior economist at the Economic Policy Institute, a Washington-based think-tank. “It’s really creating the demand to drive this forward.”Construction spending for manufacturing facilities, once adjusted for inflation, has experienced what the Treasury department recently described as a “striking surge”, having doubled since the end of 2021. Among the biggest booms have been in computer, electronics and electrical manufacturing, where spending has quadrupled since the beginning of 2022.Treasury officials and other government authorities, including the central bank, maintain the economy will skirt a painful contraction later this year or next, even though they expect growth to slow. Zandi is among those to bet against a recession, in large part because the manufacturing sector is now on a “more solid, long-term fundamental ground”.“This time may be different because manufacturing is just in a very different place than it typically is coming into an economic downturn,” he said. More

Janet Yellen says there is “ample room” for US and Chinese companies to boost trade and investment, despite security tensions, during a trip to Beijing aimed at easing friction between the two powers.Speaking at the Diaoyutai State Guest House in Beijing at the opening of her meeting Chinese economic tsar He Lifeng on Saturday, the US Treasury secretary said a “wide swath” of the two countries’ economies should be able to interact in ways that were “uncontroversial to both governments”.“The fact that despite recent tensions we set a record for bilateral trade in 2022 suggests there is ample room for our firms to engage in trade and investment,” Yellen said. When she addressed He and his economic team in a cavernous room in the guest house, Yellen repeated her call for Beijing and Washington to enhance communication, including on macroeconomic and financial stability.“Amid a complicated global economic outlook, there is a pressing need for the two largest economies to closely communicate and exchange views on . . . various challenges,” Yellen said.Yellen was visiting Beijing just weeks after secretary of state Antony Blinken became the first Biden administration cabinet official to travel to China. The trips are part of an effort to stabilise relations, which have fallen to their lowest level in decades. An earlier attempt was derailed after China flew a suspected spy balloon over North America.Yellen has attempted to tread a fine line, calling for enhanced communication while urging Beijing not to overreact to security measures that the Biden administration has taken to prevent American technology being used to help the Chinese military. “The United States will take targeted actions to protect our national security. While we may disagree on these actions, we should not allow that disagreement to lead to misunderstandings, particularly those stemming from a lack of communication, which can unnecessarily worsen our bilateral economic and financial relationship,” she said.Earlier on Saturday Yellen met Chinese climate finance experts. In her meeting, she said the US and China — the world’s two largest emitters of greenhouse gases and the largest investors in renewable energy — had “a joint responsibility . . . to lead the way”.“If China were to support existing multilateral climate institutions like the Green Climate Fund and the Climate Investment Funds alongside us and other donor governments, we could have a greater impact than we do today,” Yellen said. John Kerry, President Joe Biden’s special envoy for climate change, is expected to be the next senior American official to travel to China.Yellen’s meeting with He is widely viewed as the most consequential of her four-day trip.In addition to being the longest meeting, it gave her team a chance to learn about He, a protégé of President Xi Jinping who is relatively unknown outside China. He has kept a low profile in Chinese state media coverage since assuming the role in March.He, who was appointed as vice-premier, succeeded Liu He as China’s economic tsar. While Liu was respected abroad for overseeing technocrats at the central bank and finance ministry, He’s experience was at the National Development and Reform Commission in charge of state planning.He has advocated for greater openness to foreign investment but there are concerns that as a Xi loyalist he would be unlikely to push back against Beijing’s tendency to consolidate more control in the hands of state-owned enterprises.The meeting also included Pan Gongsheng, the incoming head of China’s central bank. More

BEIJING (Reuters) – U.S. Treasury Secretary Janet Yellen, a trailblazer in the field of economics, met with six female economists in Beijing on Saturday, an effort to spotlight gender diversity following meetings with China’s largely male government leaders.Yellen, the first woman to head the U.S. Treasury, has made women’s contributions and importance to economies a focal point of her tenure, often meeting with women economists and entrepreneurs during her travels, and hailing the benefits of boosting women’s participation in the workforce and leadership.A senior Treasury official said the lunch with the Chinese economists would give Yellen, who was also the first woman to head the U.S. Federal Reserve, a chance to “interact with a number of people kind of outside the normal policy structure.” Treasury did not name the women participating.Yellen, 76, told the women she had seen China’s adoption of market-based economic policies transform the country and lift hundreds of millions of people out of poverty since she began her career in the 1970s.”It is my hope for the benefit of both China and the United States, as well as for the broader global economy, that those policies are carried out moving forward,” Yellen said, echoing comments on Friday to Chinese Premier Li Qiang, in which she urged China to adopt more market-based reforms.Yellen told the women – one of whom described herself as a feminist economist – she was curious to learn more about their backgrounds and research.”I’m sure we share similar stories and experiences about what a career in economics is like, and the challenges you can face,” Yellen said. “I see it all the time when I’m almost the only woman in the room, and I’m sure many of you have that same experience at decision-making tables.”Treasury said Yellen and the participants discussed the Chinese economy and opportunities to increase the representation of women in the workforce, including in leadership positions.”The Secretary underscored that women’s participation in the workforce is one of the major drivers of creating inclusive growth,” Treasury said. “She also noted that women’s contributions to economics, in particular, are important to help ensure that economic research and policymaking appropriately reflect society’s priorities.”Chinese President Xi Jinping’s decade as the ruling Communist Party’s general secretary has seen the number of women in politics and top government roles decline and gender gaps in the workforce widen, with the government emphasizing more traditional roles for women.A June report by the United Nations urged China to adopt statutory quotas and a gender parity system to boost women’s representation in government.The U.N. Committee on the Elimination of Discrimination against Women found that women comprise just over 26% of deputies to China’s 14th National People’s Congress and since October have had no representation in the 24-member Politburo of the Communist Party, a first in 20 years.China’s top female politician is Shen Yiqin, appointed in March as one of five state councillors. She ranks higher than a minister and oversees social welfare, veteran affairs and sports.President Joe Biden’s 25-member Cabinet, by contrast, is the most gender-diverse in U.S. history, with Yellen being one of 13 female members.One-quarter of the U.S. Senate and 28.7% of the House of Representatives seats are held by women, according to Rutgers University’s Center for Women in Politics.China also lags in terms of women’s representation in the top echelons of industry, a recent study showed.Bain & Co and leadership advisory firm Spencer Stuart reported in March that women account for only 19% of top business executives, compared to an average of 25% in leading countries. More