Trump's trade war is inflicting pain on manufacturing states
. Average monthly job creation was 187,200 between July 2018 and July 2019, compared to 204,000 in the preceding twelve months – a drop of 16,830 in the number of jobs created each month. The decline came largely from slowing manufacturing employment, where average monthly job growth dropped by 11,080 during that period. Declining manufacturing job growth thus equaled almost two-thirds of the total slowdown in job growth, with a drop in construction job growth accounting for all of the rest.
Some states depend more heavily on manufacturing and the good jobs it brings than others. Manufacturing employment accounts for above-average shares of economic activity, for instance, in large states such as Michigan, Ohio and Pennsylvania, while it is fairly small in larger states such as Colorado, Florida, New Mexico and New York .
Manufacturing states, which I define as having manufacturing employment shares greater than nine percent in July 2019, have seen larger slowdowns in employment growth than non-manufacturing states, defined as manufacturing employment shares of less than seven percent. Twenty-four states count as manufacturing states, 18 states and the District of Columbia as non-manufacturing states and the remaining eight states including California, Texas and Washington as middle-ground states.
Several states have seen their total employment actually fall. The total number of jobs was below its most recent peak in July 2019 in 10 manufacturing states and 10 non-manufacturing states, but only in one middle-ground state – Maine. The falloff in jobs started as early as January in Ohio and Wisconsin and in March in Indiana, but happened more broadly later in the spring in the other states with falling job numbers.
Donald Trump’s erratic approach to international trade has slowed the economy and the labor market, just as workers across the income spectrum finally saw meaningful wage gains due to the tightening job market. Most states have seen slowing job growth and many have seen flat and falling jobs since early this year. The fallout from the job market slowdown has already been felt unevenly, especially in large manufacturing states such as Michigan, Ohio, Pennsylvania and Wisconsin.
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