Concerns grow over steep drop in jobs in US

US manufacturing jobs contracted for the eighth straight month in October, driven by lower demand and companies pulling back on production, figures showed.

The sector — which is responsible for approximately 10.1 percent of GDP as of 2024 — is an important barometer of the health of the economy and responsible for at least 12.7 million jobs, according to the Bureau of Labor Statistics.

Employers cut 12,000 manufacturing jobs in August alone and payrolls in the sector have shrunk by 42,000 since April, the nonpartisan Center for American Progress found.

The Institute for Supply Management's survey, a crucial monthly gauge of US economic activity, released on Nov 3, found its manufacturing Purchasing Managers Index fell to 48.7 last month from 49.1 in September. A reading below 50 indicates contraction in manufacturing, Reuters reports.

The figures come amid the US administration's attempts to put policies in place to revitalize the industry.

Economists have repeatedly warned that it may be difficult to revive the US manufacturing sector quickly.

Numerous machinery manufacturers told the ISM that "the products we import are not readily manufactured in the US, so attempts to reshore have been unsuccessful".

It may take years to build new plants, gain investments and allow companies to source machinery and products for the low prices that are already on offer in Asia.

In the meantime, US businesses are absorbing higher costs due to the tariffs, which breed uncertainty, say experts.

Gary C. Hufbauer, an expert on international trade and a nonresident senior fellow at the Peterson Institute for International Economics, told China Daily: "US business firms have absorbed about 75 percent of the tariffs up to August and the policy has discouraged investment in almost every sector."

US manufacturing jobs have been on the decline for decades, according to the Federal Reserve Bank of St. Louis.

In 1960, manufacturing accounted for 33.7 percent of all employment. Last year, the industry lost 87,000 jobs.

Additionally, in the US there are nearly 300 robots for every 10,000 manufacturing workers, the International Federation of Robotics said.

The "One Big Beautiful Bill Act "which was enacted in July and the hard-line immigration stance have also caused issues. The act repealed a tax credit that brought down EV prices for consumers by up to $7,500.

Automakers have announced thousands of job cuts, many in electric vehicles, unions estimated.

General Motors announced it will lay off 1,200 workers from its Detroit plant, the Detroit News reported.

In October, Rivian Automotive laid off 4.5 percent of its workforce, or over 600 employees.

Calls for rethinking

"These are not changes that were made lightly," Rivian's Chief Executive Officer RJ Scaringe said in an email to staff members.

"With the changing operating backdrop, we had to rethink how we are scaling our go-to-market functions."

Immigration raids and policy changes have also reduced the number of staff members who would have been employed at factories nationwide.

The US administration revoked temporary protected status for about 500,000 Cubans, Nicaraguans, Haitians and Venezuelans.

In July, a JBS pork production facility in Iowa had to let go of 200 immigrants who were no longer eligible to work.

Other firms told the ISM that tariffs had hit farmers' finances, which in turn affected their ability to buy new equipment.

Farm equipment giant John Deere will lay off 200 workers at plants in Illinois and Iowa, online publication AgWeb reported.

During an earnings call, the company said it had paid $300 million in tariff-related costs, including on steel and aluminum imports. It said its sales had dropped in August compared to the same month in 2024.

Factory employment remains weak, the ISM said, because after some layoffs, an immediate replacement is not readily available.

"Workers will have to wait a while longer to join the assembly line, because there are no good jobs out there yet," Christopher Rupkey, chief economist at FWD Bonds, told Reuters.

belindarobinson@chinadailyusa.com