Advent Of The Trump Recession

It seems like every few days I've been writing a post about another broken Trumpanzee campaign promise. This fits right in-- and in a big way since whatever support Trump had from non-racists, this is right at the heart of it. Don Lee reported for the L.A. Times that despite Trump's vow to boost industry, the manufacturing sector is officially in recession. As Lee points out, during Trump’s first two years in office, "his standing with many voters was buoyed by a surge in manufacturing that helped create millions of new jobs and undergirded the whole U.S. economy." That sure seems to have ended quickly. Maybe the recession there isn't as heavy as the one in the farm belt but it is just as contagious.

[M]anufacturing has plunged into recession and is threatening to pull down other sectors, perhaps hitting hardest on supporters in those states that helped put Trump in office.

Impeachment may be dominating the news, but the less-noticed industrial slump ultimately could pose a greater threat to Trump’s reelection.

As measured by the Federal Reserve, manufacturing output shrank over two straight quarters this year. That’s the common definition of recession.

A separate, widely followed index drawn from purchasing managers showed September’s contraction in manufacturing was the steepest since June 2009, with production, inventories and new orders all falling.

And after adding nearly half a million jobs in the prior two years, which Trump frequently stressed in hard-hat rallies throughout the Midwest, manufacturing employment has stalled.

Instead of healthy job growth, layoff announcements have spiked this year, especially in battleground states like Pennsylvania and Michigan. Friday’s jobs report for September showed a slight drop in total factory jobs.

Manufacturing today accounts for only about 10% of economic activity, and so far, the overall economy and employment in the U.S. are still growing. But the pace has slowed considerably this year. The faltering industrial sector has started to crimp businesses in the transportation and warehousing sectors. And there are growing worries of spillover effects in the larger services sector and broader economy.

Even if the nation can avoid a recession next year, a manufacturing downturn could prove to be politically damaging for Trump, who rode to the White House on enthusiastic support from blue-collar workers in key states and on his promise to revive America’s coal, steel and other industries.

Although manufacturing comprises a far smaller portion of the whole U.S. economy than it once did, it remains very important in a handful of swing states that Trump narrowly won in 2016-- including Wisconsin, Michigan and Pennsylvania.

Today, Trump is badly underwater in those states and across the Midwest. According to the most recent Morning Consult Tracking Trump polling, Trump's favorability vs unfavorability is absolutely dismal-- and probably fatal.

• Pennsylvania- minus 8 points
• Ohio- minus 5 points
• Michigan- minus 10 points
• Indiana- plus 2 points
• Wisconsin- minus 11 points
• Illinois- minus 22 points
• Minnesota- minus 11 points
• Iowa- minus 14 points

Going back to Lee, he wrote that "In the months before the 2016 election, it didn’t help Hillary Clinton’s prospects that manufacturing was on the skids and factory jobs were shrinking, thanks to a drop-off in energy-related investments, a strong dollar and lackluster demand for American goods in emerging economies. Some of those same factors are again weighing against American industry. But analysts and business leaders say the single biggest restraint on manufacturing this year has been of Trump’s own making: excessive use of tariffs and his trade wars with China and other countries. Of utmost concern has been Trump’s confrontation with China, the world’s second-largest economy. Many American firms have major operations there-- both manufacturing, such as smartphones, and sales, such as motor vehicles. And U.S. companies rely on China for a big chunk of their sales and profits. U.S. businesses have put off spending on major equipment and buildings as they’ve sought to look through the fog of a swirling trade conflict marked by Trump’s haphazard tariff actions and off-and-on negotiations."

"In November 2020, if Trump even makes it that far without first getting impeached and convicted," said Ted Lieu (R-CA) today, "the voters will know that he lied to them. His economic polices have benefitted the top 1% at the expense of everyone else, including those in the manufacturing sector. Trump's chaotic and ineffective trade wars have hurt the American economy, and put many farmers and manufacturers out of business. It doesn't matter anymore what Trump says, the voters will know if they have a job, and whether their community is better or worse because of his tenure. I predict an even bigger blue wave in 2020."