Was U.S. manufacturing in recession before the pandemic, as Pete Buttigieg said?

Transportation Secretary Pete Buttigieg, a leading surrogate for the Biden-Harris administration, attracted notice when he sat for an interview with Fox News, which typically draws audiences that support former President Donald Trump.

In his July 28 interview on "Fox News Sunday," Buttigieg, who’s been floated as a possible vice presidential pick for Vice President Kamala Harris, the presumptive Democratic presidential nominee,  took on Trump’s record in office.

He criticized Trump's broken promises on economic growth and on delivering an infrastructure bill. An example, Buttigieg said, was that "before the pandemic, America went into a manufacturing recession, which really hurt places like where I come from in the industrial Midwest. He broke his promise for that kind of economic growth."

Several economists agreed that there’s evidence to support what Buttigieg said. "There’s some truth to that," said Douglas Holtz-Eakin, president of the center-right American Action Forum.

The Transportation Department did not respond to an inquiry for this article.

There’s a clear definition of a "recession" for the entire economy: A committee of economists with the nonprofit National Bureau of Economic Research decides, retroactively, when the U.S. economy entered and exited a recession, using a range of economic metrics.

By contrast, defining a "recession" for one sector, such as manufacturing, is murkier. Because there’s no official arbiter, someone can use one of several metrics, particularly employment level and output in goods.

Looking at employment levels within manufacturing, the number of workers rose modestly, by about 3.3% during Trump’s presidency before the pandemic. 

However, a closer look shows that in 2019, manufacturing employment flatlined, then fell slightly by the pandemic’s eve in March 2020.

The second useful metric is the production of manufactured goods — and the recessionary trend line is even clearer here.

For that measure, we consulted federal Bureau of Labor Statistics data for inflation-adjusted output for all manufacturing workers. This statistic, calculated quarterly, compares how much higher or lower output was in a given quarter compared with the same quarter in the previous year.

By this metric, manufacturing output reached an 11-year peak in 2018’s third quarter, which came during Trump’s presidency. There was growth in the next quarter, but it slowed. Then, in the first quarter of 2019, the year-over-year change turned negative, partly because of a trade war with China, and it remained negative in each of the four succeeding quarters. 

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Rob Portman

stated on June 30, 2010 in a news release

Since the Democrats’ stimulus went into effect last year, Ohio has lost about 150,000 Jobs.

In other words, manufacturing output was declining for more than a year — then the pandemic hit.

A similar statistic — the industrial production index, calculated by the Federal Reserve — mirrored this pattern. This monthly statistic fell by about 2.4% from August 2018 to February 2020.

Collectively, these metrics show that "there was weakening in terms of industrial output," said Tara Sinclair, a George Washington University economist.

The decline was "chump change compared with the drop that occurred in the COVID-19 recession," said Gary Burtless, an economist with the Brookings Institution, a Washington, D.C., think tank. Still, these metrics show that "real output was falling even before COVID-19 infections began to soar."

Burtless added that this was known at the time. A Washington Post news report in January 2020 was headlined, "U.S. manufacturing was in a mild recession during 2019, a sore spot for the economy."

The article cited Federal Reserve data showing U.S. factory production shrinking by 1.3% during 2019, "the worst year for manufacturing since 2015, as the trade war, lackluster global growth and problems at airplane maker Boeing hurt America’s industrial economy."

Other news outlets, including CNN and the Los Angeles Times,.also described a recession in manufacturing around the same time, 

Buttigieg said, "Even before the pandemic, America went into a manufacturing recession."

There is no official definition for when an industrial sector enters recession, but by two common metrics — employment and output — U.S. manufacturing was tipping negative starting in early 2019, Trump’s third year in office.

Although manufacturing employment rose robustly for the first two years of Trump’s term, this job growth stalled in his third year and fell slightly before the pandemic hit during his fourth year.

Manufacturing output, by two separate metrics, fell modestly but consistently following its 2018 peak.

The data doesn’t point to a raging recession in manufacturing, but it does provide strong evidence of a downturn.

We rate Buttigieg’s statement Mostly True.