The Week in Review: March 31, 2025
Manufacturing in Crisis
Over the past month, we have approached the issue of tariffs from the market's perspective, specifically that of investors.
Let’s take a different approach today. We’ll examine the issue from the perspective of domestic manufacturers and manufacturing workers. The graphic below effectively summarizes the point.
Industrial production has risen by 14% since 2000, but it lags significantly behind a 70% rise in Gross Domestic Product over the same period.
Manufacturing is a subset of industrial production. It excludes mining and utility production, accounting for 75% of industrial production according to the Federal Reserve.
It’s up by a scant 4.4%.
That’s right. Over the past quarter century, manufacturing production has expanded by less than 5%! Moreover, it remains well below the peak achieved nearly 20 years ago.
Plus, manufacturing employment has declined by a whopping 26%, thanks to efficiency gains and productivity!
Let’s throw out one more statistic. According to the U.S. Bureau of Labor Statistics, total U.S. employment increased from 131 million to 159 million during the period surveyed. Manufacturing employment, however, fell from 17.2 million to 12.8 million. While a few select U.S. manufacturing sectors are thriving, others struggle to produce goods profitably domestically.
Some have simply given up and closed their shops or moved production overseas.
Market Summary
TWO FOR THE ROAD
“Government is not the generator of economic growth; working people are.” - Phil Gramm
The average bull market sees a total return of +192% from trough-to-peak. The current bull market has risen +58%. With that, it would be perfectly normal for the bull market to continue here. - Exhibit A, March 18, 2025
Please do not hesitate to contact me with any questions or concerns.
I hope you have a great week!
Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management
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