Manufacturing powers economic, stock market gains
A production line manufacturing
Kai Ryssdal: We opened yesterday with the strong showing tech companies have been putting on this earnings season. All the big names -- from Apple to IBM -- are making piles of money.
Today, it's companies like Honeywell and United Technologies and General Electric, with a 77 percent increase in quarterly profits. After years of hearing about the demise of American industry, manufacturing, it seems, is having something of a renaissance.
Marketplace's Stacey Vanek Smith has more on the turnaround.
Stacey Vanek Smith: Back in the '60s, a third of U.S. jobs were in manufacturing. These days, it's about 10 percent. But in recent months, manufacturing has boomed.
Michelle Meyer: In the beginning of the recovery, manufacturing was one of the main sources of growth.
Bank of America economist Michelle Meyer says when the economy slows, manufacturing drops way off, and when things start to improve, it streaks ahead. In the first quarter, manufacturing grew four times faster than the rest of the economy.
Meyer: There's a lot of pent-up demand for durable products such as automobiles, electronics. Consumers cut back dramatically during the recession, and now they're looking to purchase them.
Also contributing to the bounce-back? Demand for U.S. goods overseas. The dollar is weak and China and India are growing fast.
Still, what's good for the industry isn't necessarily good for the worker, says Harvard economist Kenneth Rogoff. He points out that even as manufacturing companies have boomed, they haven't restored all the jobs they shed during the recession.
Kenneth Rogoff: The companies will continue to do pretty well, but I don't think this is the future of American jobs. Manufacturing's an area where we're innovative, but the production side is ever-shrinking.
Rogoff says that factory jobs will continue to migrate to countries where labor is cheaper. Take the iPad: concept, design and some high margin parts are produced stateside -- the rest is made in China.
In New York, I'm Stacey Vanek Smith for Marketplace.