US Manufacturing Loses 100,000 Jobs as Output Rises 2.3% in ‘Quiet Boom’

Today’s Question

Manufacturing lost 100,000 jobs

AI, semiconductors help drive output

Since the Industrial Revolution, economic booms have typically gone hand in hand with job growth. As production increases, demand usually rises for labor, one of the main inputs in manufacturing. In the US, that pattern has recently started to break down. Output is rising even as employment falls, fueling analysis that the country may be entering a so-called quiet boom driven by artificial intelligence.

The Wall Street Journal reported that US manufacturing employment has fallen by about 100,000, or 0.6%, since January 2025. That marks the steepest decline since 2020, when the Covid-19 pandemic was in full swing. Over the same period, output rose 2.3% and shipment value increased 4.2%. While both remain below pre-global financial crisis levels, they have clearly rebounded after declining over the past two years. The trend contrasts with 2020, when US industrial production plunged 11.2% as employment fell sharply.

The Journal attributed the shift to the AI boom. As AI adoption spreads, demand has surged for semiconductors, networking equipment, and power and cooling systems, lifting both domestic production and imports in the US. Aerospace and transportation equipment also posted strong growth last year. US production in those sectors jumped 28%, driven by expectations for a SpaceX initial public offering, increased Boeing aircraft deliveries and a broadening global arms race.

Those industries are capital-intensive and require highly skilled labor, making them less labor-intensive overall. As a result, rising output does not necessarily translate into more jobs.

By contrast, production has fallen in traditional manufacturing sectors that employ more workers. In automobiles and auto parts, imports fell 14% because of tariffs, but domestic production also declined 3%, showing little clear improvement. In furniture, imports dropped 22%, while production also fell 3%.

Yoon Dong-yeol, a business administration professor at Konkuk University, said the decline in employment during a period of solid production growth is notable because it does not reflect a recession. He described it as a selective boom in which a handful of high-value industries, including AI, semiconductors and aerospace, are lifting overall industrial output.

The effects of higher tariffs and tighter immigration controls are also drawing attention. Kwon Hyuk-joo, a research fellow at the Korea Institute for International Economic Policy, said the labor market's weakness is more likely tied to immigration policy. Tariff-driven reshoring, however, does not yet appear to be having much effect. Analysis by the McKinsey Global Institute found that production is also rising in industries where imports are increasing, suggesting domestic output and imports are acting as complements rather than substitutes.

New York = Park Shin-young, correspondent / Son Ju-hyung, reporter, Hankyung.com nyusos@hankyung.com