It’s been a while since I’ve published an update on the state of our manufacturing industry. So let’s start with employment given today’s release of November’s job numbers. Manufacturing employment has declined year-over-year for now 9 months straight from March to November. This is the longest stretch since the multiple year-over-year declines that concluded in September of 2010. This is certainly not a sign of strong economic growth that the Federal Reserve and financial news outlets have been pandering with little evidence. And yet, the biggest indication of how much the manufacturing industry has been struggling of late is that it has occurred while the U.S. dollar has been strong.
Counter to general belief, a weak currency is not good for the manufacturing industry and even the data demonstrates this. From 2000 to 2010, the U.S. dollar dropped steadily and so did manufacturing employment. Employment only turned around when the U.S. dollar reversed course in 2010. US manufacturers depend heavily on supplies produced abroad and it doesn’t help them when those goods become more expensive when the dollar drops in value. But the fact that employment has been going down with a strong dollar lets you know that catastrophe lies ahead when the air starts to come out of this dollar bubble.