Time to Stop Blaming Manufacturing Job Losses on the (Nonexistent) Shift to Services

Adams Nager October 23, 2015
October 23, 2015

Some explain away manufacturing job losses by saying we are naturally shifting to consuming more services, writes Adams Nager in Innovation Files. The only problem is that it's not true. New data from the Federal Reserve shows that services are actually a smaller portion of total consumption, while durable manufacturing represents a growing percentage of consumer spending, when controlling for inflation. This finding helps demonstrate that severity of U.S. manufacturing decline and rebuffs critics who do not believe that manufacturing losses hurt the U.S. economy.