linkage
Let us begin with the bad news. According to the Bureau of Labor Statistics:
The most recent peak for manufacturing employment occurred in March 1998, reaching 17.6 million.
Manufacturing employment declined 16 percent in 3 years, to 14.6 million Americans in July 2003 from 17.3 million in 2000.
It is important to remember that much of the change in industrial employment is an effect of changes in the classification of various jobs. Big companies used to do everything in house, so that people like janitors and accountants were classified as "manufacturing" workers simply because they worked for manufacturing companies. Over the years, such companies discovered that it was more economical to outsource such work. That is why "business services" is one of the fastest rising categories of employment in the United States.
In contrast to employment, industrial production has remained relatively strong. The Federal Reserve Board's industrial production index - which covers industrial sector output, capacity and capacity utilization - has fluctuated only slightly since 1998, despite a recession in the meantime.
In contrast to employment, industrial production has remained relatively strong. The Federal Reserve Board's industrial production index - which covers industrial sector output, capacity and capacity utilization - has fluctuated only slightly since 1998, despite a recession in the meantime.
Considering total goods production (including things like mining and agriculture in addition to manufacturing), real goods production as a share of real (inflation-adjusted) Gross Domestic Product (GDP) is close to its all-time high.
In the second quarter of 2003, real goods production was 39.2 percent of real GDP; the highest annual figure ever recorded was 40 percent in 2000. See the Figure.
By contrast, in the "good old days" of the 1940s, 1950s and 1960s, the United States actually produced far fewer goods as a share of total output, reaching 35.5 percent in the midst of World War II.
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The best measure of comparative productivity levels is real GDP per employed person. According to the Bureau of Labor Statistics, in 2002 the United States continued to lead the world in this category.
U.S. workers produced an average of $71,600 in output (in 1999 dollars), followed in a not-so-close second by Belgium, where each worker produced $64,100.
Japanese workers - renowned for their productivity - each produced just $51,600 and Korean workers produced even less: $34,600.