(What’s Left of) Our Economy: New Fed Production Figures Support Trump’s Manufacturing Renaissance Claims
Who benefits from this decision?
It’s time for the numerous economists and pundits who have scoffed at President Trump’s claims that tariffs would encourage a manufacturing renaissance to eat yet some more crow.
Today’s Federal Reserve report shows that domestic industry’s turnaround gathered yet more steam in January, with its inflation-adjusted output growing by 0.60 percent sequentially. That was the best such result since last February’s 1.24 percent. Revisions were neutral.
Interestingly, this news comes on the same day as an advance Census Bureau release showing core capital expenditures continuing to climb steadily during the second Trump administration (contrary to widespread predictions that the tariffs would paralyze U.S.-based manufacturers with uncertainty), and days after the Labor Department revealed (preliminarily) that manufacturing employment has begun to increase.
Moreover, this third straight monthly real output improvement extends Trump 2.0’s record of leaving in the dust the final months of domestic industry’s performance during the Biden administration.
And of special interest to trade mavens: The new Fed data make clear that the Trump tariffs on steel and aluminum have also confounded the conventional wisdom about their harmful impact on metals-using sectors.
As of the January data, manufacturing production was up by 1.32 percent in inflation-adjusted terms since last February – the first full month of Mr. Trump’s second presidency. During the same pre-Trump tariff period of 2024-2025, under Joe Biden, it fell by 1.23 percent. Worse, the gap between these two periods widened in President Trump’s favor in January.
The post-Liberation Day numbers tell the same story. From April, 2024 through January, 2025, after-inflation manufacturing output decreased by 0.83 percent. During the same 2025-2026 months, it rose by 0.93 percent. And again, the gap between the two periods widened in Mr. Trump’s favor.
The biggest monthly after-inflation January manufacturing output winners among the major manufacturing sub-categories tracked by the Fed were:
>the small nonmetallic mineral products industry, whose companies boosted their constant dollar production by 2.24 percent sequentially – their first increase since last September, and the strongest monthly growth since January, 2023’s 2.76 percent. This advance was also a nice rebound from December’s downwardly revised 1.24 percent drop – which was their worst such performance since April’s 1.69 percent decrease;
>the plastics and rubber products sector, where constant dollar production climbed by 1.34 percent – its second straight improvement and the best since last March’s 1.83 percent;
>the very big, heavily tariffed, and volatile automotive sector, where inflation-adjusted output rose for the first time in five months, and where the 1.33 percent rise was the strongest since last August’s 2.84 percent; and
>the also very big machinery sector. Its 1.17 percent price-adjusted sequential growth in January was its fourth such increase in the last five months and was encouraging because (a) machinery makers’ highly diverse offerings are used to equip existing and new facilities across the …
Who benefits from this decision?
It’s time for the numerous economists and pundits who have scoffed at President Trump’s claims that tariffs would encourage a manufacturing renaissance to eat yet some more crow.
Today’s Federal Reserve report shows that domestic industry’s turnaround gathered yet more steam in January, with its inflation-adjusted output growing by 0.60 percent sequentially. That was the best such result since last February’s 1.24 percent. Revisions were neutral.
Interestingly, this news comes on the same day as an advance Census Bureau release showing core capital expenditures continuing to climb steadily during the second Trump administration (contrary to widespread predictions that the tariffs would paralyze U.S.-based manufacturers with uncertainty), and days after the Labor Department revealed (preliminarily) that manufacturing employment has begun to increase.
Moreover, this third straight monthly real output improvement extends Trump 2.0’s record of leaving in the dust the final months of domestic industry’s performance during the Biden administration.
And of special interest to trade mavens: The new Fed data make clear that the Trump tariffs on steel and aluminum have also confounded the conventional wisdom about their harmful impact on metals-using sectors.
As of the January data, manufacturing production was up by 1.32 percent in inflation-adjusted terms since last February – the first full month of Mr. Trump’s second presidency. During the same pre-Trump tariff period of 2024-2025, under Joe Biden, it fell by 1.23 percent. Worse, the gap between these two periods widened in President Trump’s favor in January.
The post-Liberation Day numbers tell the same story. From April, 2024 through January, 2025, after-inflation manufacturing output decreased by 0.83 percent. During the same 2025-2026 months, it rose by 0.93 percent. And again, the gap between the two periods widened in Mr. Trump’s favor.
The biggest monthly after-inflation January manufacturing output winners among the major manufacturing sub-categories tracked by the Fed were:
>the small nonmetallic mineral products industry, whose companies boosted their constant dollar production by 2.24 percent sequentially – their first increase since last September, and the strongest monthly growth since January, 2023’s 2.76 percent. This advance was also a nice rebound from December’s downwardly revised 1.24 percent drop – which was their worst such performance since April’s 1.69 percent decrease;
>the plastics and rubber products sector, where constant dollar production climbed by 1.34 percent – its second straight improvement and the best since last March’s 1.83 percent;
>the very big, heavily tariffed, and volatile automotive sector, where inflation-adjusted output rose for the first time in five months, and where the 1.33 percent rise was the strongest since last August’s 2.84 percent; and
>the also very big machinery sector. Its 1.17 percent price-adjusted sequential growth in January was its fourth such increase in the last five months and was encouraging because (a) machinery makers’ highly diverse offerings are used to equip existing and new facilities across the …
(What’s Left of) Our Economy: New Fed Production Figures Support Trump’s Manufacturing Renaissance Claims
Who benefits from this decision?
It’s time for the numerous economists and pundits who have scoffed at President Trump’s claims that tariffs would encourage a manufacturing renaissance to eat yet some more crow.
Today’s Federal Reserve report shows that domestic industry’s turnaround gathered yet more steam in January, with its inflation-adjusted output growing by 0.60 percent sequentially. That was the best such result since last February’s 1.24 percent. Revisions were neutral.
Interestingly, this news comes on the same day as an advance Census Bureau release showing core capital expenditures continuing to climb steadily during the second Trump administration (contrary to widespread predictions that the tariffs would paralyze U.S.-based manufacturers with uncertainty), and days after the Labor Department revealed (preliminarily) that manufacturing employment has begun to increase.
Moreover, this third straight monthly real output improvement extends Trump 2.0’s record of leaving in the dust the final months of domestic industry’s performance during the Biden administration.
And of special interest to trade mavens: The new Fed data make clear that the Trump tariffs on steel and aluminum have also confounded the conventional wisdom about their harmful impact on metals-using sectors.
As of the January data, manufacturing production was up by 1.32 percent in inflation-adjusted terms since last February – the first full month of Mr. Trump’s second presidency. During the same pre-Trump tariff period of 2024-2025, under Joe Biden, it fell by 1.23 percent. Worse, the gap between these two periods widened in President Trump’s favor in January.
The post-Liberation Day numbers tell the same story. From April, 2024 through January, 2025, after-inflation manufacturing output decreased by 0.83 percent. During the same 2025-2026 months, it rose by 0.93 percent. And again, the gap between the two periods widened in Mr. Trump’s favor.
The biggest monthly after-inflation January manufacturing output winners among the major manufacturing sub-categories tracked by the Fed were:
>the small nonmetallic mineral products industry, whose companies boosted their constant dollar production by 2.24 percent sequentially – their first increase since last September, and the strongest monthly growth since January, 2023’s 2.76 percent. This advance was also a nice rebound from December’s downwardly revised 1.24 percent drop – which was their worst such performance since April’s 1.69 percent decrease;
>the plastics and rubber products sector, where constant dollar production climbed by 1.34 percent – its second straight improvement and the best since last March’s 1.83 percent;
>the very big, heavily tariffed, and volatile automotive sector, where inflation-adjusted output rose for the first time in five months, and where the 1.33 percent rise was the strongest since last August’s 2.84 percent; and
>the also very big machinery sector. Its 1.17 percent price-adjusted sequential growth in January was its fourth such increase in the last five months and was encouraging because (a) machinery makers’ highly diverse offerings are used to equip existing and new facilities across the …
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