No, America is not in a "stealth manufacturing boom"

Tariffs are canceling out the tailwinds.

Photo by John Morgan via Wikimedia Commons

Greg Ip of the WSJ is one of my favorite economics writers, and you should always read what he writes. But in a recent post about manufacturing, I think he gets the main narrative wrong. Greg writes that America is in the middle of a “manufacturing revival”, which his headline writer calls a “stealth manufacturing boom”:

You won’t hear this from either critics or fans of President Trump’s tariffs, but there’s a manufacturing revival going on…Critics have focused on the fact that factory jobs have steadily slid since Trump took office last year…Unlike jobs, though, actual factory output has risen briskly, and may even be picking up speed. This stealth recovery, though, isn’t because of tariffs. Instead, credit goes to the most basic economic force of all: demand. The U.S. is good at making things that happen to be in big demand right now.

As a macro story, “AI boom cancels out tariffs” isn’t a bad description of the U.S. economy right now — including the manufacturing sector. But it’s just not right to say that the former is winning out when it comes to manufacturing.

Let’s look at the data. Here’s Greg’s evidence for the boom:

First, a few data points. Since January 2025, manufacturing jobs have indeed fallen by about 100,000 workers, or roughly 0.6%. In the same period, though, manufacturing production rose 2.3%, and manufacturing shipments, unadjusted for inflation, climbed 4.2%.

Regarding manufacturing shipments…why wouldn’t you adjust for inflation? Inflation is important! Shipping more dollars of stuff doesn’t indicate a boom if a dollar is worth much less. As it happens, there’s no price series that exactly corresponds to the data series for manufacturing shipments, but we can probably approximate it by using the producer price index for manufacturing. Here’s what we get when we do that:

Do you see a “stealth manufacturing boom” since January 2025? I sure don’t. What I do see is the continuation of a decades-long stagnation in American manufacturing.

Let’s look at some other measures. Here’s industrial production in the manufacturing sector:

I guess if you squint very hard, you can see a slight rise since the end of 2024. But really this is just the same story as before: American manufacturing has been stagnating since 2008.

Let’s look at gross manufacturing output, adjusted for output prices:

Same exact story, only this is quarterly data and the last quarter of 2025 looks bad.