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How growth in manufacturing jobs drove January’s strong economic results

The U.S. economy added 304,000 jobs in January, according to new economic survey data. Although the government shutdown pushed the unemployment rate higher, the payroll report shows that hiring was much stronger than expected. John Yang talks to Neil Irwin of The New York Times and Danielle Paquette of The Washington Post about what the numbers mean and why manufacturing jobs are so important.

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  • Judy Woodruff:

    2019 got off to a strong start on the jobs front, with payrolls far higher than expected, and a long-lasting recovery that has now added jobs for 100 months consecutively through two presidents.

    It comes at a moment when there have been questions over President Trump's ability to deliver blue-collar manufacturing jobs in high-profile cases where he has personally intervened.

    John Yang explores both parts of this story.

  • John Yang:

    Judy, let's break down the new data with Neil Irwin, senior economics correspondent for The New York Times, and Danielle Paquette, national labor reporter for The Washington Post.

    Welcome to you both.

    Neil, let me start with you.

    There has been a lot of talk and concern about a recession, the economy going into a recession. What does today's jobs report tell us about the state of the economy?

  • Neil Irwin:

    Look, I think those recession fears we were hearing a lot of last month are out the window for now.

    This is a strong economy. It's a strong labor market. We have also seen the stock market recover in the last few weeks. This seems like an economy that is on relatively steady footing, despite some of the risks that we have seen, 304,000 jobs added in January, still a low unemployment rate. Things look pretty good.

  • John Yang:

    And, Danielle, was there any evidence of the effect of the government — partial government shutdown in these numbers?

  • Danielle Paquette:

    You saw more workers self-identifying as temporarily laid off. That number shot up by about 175,000.

    As people were sort of forced to figure out, what do I do, I can't go to work, you also saw the number of people working part-time jobs out of economic necessity go up. They're becoming Uber drivers. They're substitute-teaching. Some were telling me they might even pull out of those jobs in case the government shuts down again.

  • John Yang:

    People should realize there are two surveys in this, the payroll survey, which determines the jobs number, and in the household survey, which does the unemployment rate.

    And is the uptick in the unemployment rate, Neil, a reflection of furloughed federal workers?

  • Neil Irwin:

    Yes, it looks that way.

    People who weren't working reported to the survey-takers that they didn't have a job. However, their job still existed, so in the survey of employers, they showed up as still — that job still existing.

    But, as Danielle said, it's an environment where this was a tough time for government workers. It was a tough time for people who are furloughed, but it didn't really distort the overall numbers enough to really throw the expansion and the recovery off-track.

  • John Yang:

    Neil, a lot of attention being given to the manufacturing sector. What did those numbers tell us, not only about January, but over the last several years?

  • Neil Irwin:

    Look, we're seeing steady gains. Manufacturing employment keeps rising. It's 13 million jobs in its total, and it keeps kind of steadily upward.

    This is a sector that is growing, even as there are all the challenges that are well understood about American manufacturing.

  • John Yang:

    And, Danielle, one reason we have gotten a lot of attention on manufacturing is the way that President Trump has sort of personally gotten involved in this.

    One of the big deals he talked about was Foxconn, the Taiwanese firm, their plan to go into Wisconsin to build a big manufacturing plant. They promised 13,000 jobs. President Trump went to the ground-breaking. He said it wouldn't have happened without him.

    But we have also had a little turbulence in that plan this week. What — quickly, tell us what happened. What's the latest on that plan?

  • Danielle Paquette:

    That's right.

    Well, Foxconn originally billed that plan as a blue-collar revival. They said they wanted to hire thousands of manufacturing workers, people to make touch-screens at a factory. Then, earlier this week, we heard, no, the company said they were actually going to pivot to more of an engineering and research focus, which wouldn't promise blue-collar jobs.

    All of a sudden today, they flip-flopped again and said, hey, after talking to President Trump, we have decided to go back to that original blueprint. And everyone's trying to just make sense of that.

  • John Yang:

    Danielle, what does this say about the way that the president has personalized these manufacturing job announcements, not only Foxconn, but Carrier in Indiana, GM and other operations?

  • Danielle Paquette:

    That's right. It's a risky move.

    And President Trump seems to get involved with individual firms more than any president of the past. But that Carrier deal you mentioned, he showed up at that plant in Indianapolis and said, I have personally saved all of these jobs from outsourcing to Mexico.

    Then you had a union leader a couple days later tell us, actually, no about half those jobs will be lost anyway. So, as the facts emerge, it's hard to explain for President Trump sometimes why these deals didn't go the way he said they would.

  • John Yang:

    They talked — in the Foxconn deal, the officials said that there were market realities when they first said that they were scaling back and not doing a huge manufacturing plant.

    Your colleagues at The Times did a story in the past several days about why Apple is not doing more manufacturing in the United States. What does this say about the challenges to the manufacturing sector, even though it's growing, as you say, the challenges to really big expansion in U.S. manufacturing?

  • Neil Irwin:

    Look, in Asia, there are very complex supply networks that enable these advanced electronics to get made, in China and Taiwan and Korea, Japan.

    And rebuilding that, and creating a situation where there's all of the necessary parts at just the right time in an American factory is very challenging to do. That's before you get to the labor cost issue. And that's very real. American workers are paid more than Chinese workers.

    So making the economics work can be very challenging. That said, the fact that they were planning to keep this as — or are planning to keep this as a research center, is a sign of what kinds of jobs and what kinds of roles in the modern economy the United States is very good at, which is the kind of technological developments and this more advanced kinds of role.

  • John Yang:

    Danielle, you cover labor.

    Why are manufacturing jobs so important to the labor — labor unions?

  • Danielle Paquette:

    Right.

    Well, that's the best kind of — best-paying job you can get without a college degree. These are jobs that support families across the Midwest. And you saw those really hollow out in the last 20 years or so.

    But, right now, even manufacturing is shifting toward needing more high-tech skills, as we see a movement toward automation. So, even those jobs are calling for more education.

  • John Yang:

    Danielle Paquette of The Washington Post, Neil Irwin of The New York Times, thanks to you both.

  • Neil Irwin:

    Thanks, John.

  • Danielle Paquette:

    Thank you.

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