Can the resilience of the American economy save the Republicans?

Finally some good news for Donald Trump: the latest data available on the state of the American economy encourages optimism. “October flash PMIs published by S&P Global indicate that the US economy maintains solid momentum, while the euro zone's growth outlook darkens,” says Jonathan LaBerge of investment consultancy BCA Research in a recent note.

Manufacturing activity is picking up…

Better yet: the dynamic is particularly positive for the manufacturing sector. Still according to S&P Global, job creation in the industry reached its highest rate since March 2012. Good luck for Donald Trump, who campaigned by promising to bring these jobs back to American soil, in particular by using customs duties. A strategy which had until now had the opposite of the expected effect.

Thus, "the manufacturing component surprised on the upside, increasing slightly to 56.0 from 55.9, while services slowed to 57.9 from 58.8, a little below expectations. Despite this decline, the flash PMIs show that American growth remains strong, with both manufacturing and services activity remaining close to their highest levels in several years," continues Jonathan LaBerge. “New orders in the manufacturing industry have slowed but remain high, underscoring the strength of domestic demand, while new export orders have returned to expansion territory for the first time this year.”

…but these new jobs differ from previous ones

One nuance, however: these new manufacturing jobs are mainly aimed at qualified workers, with skills related to robotization, data analysis, or even equipment design.

Thus, within the industry, it is mainly knowledge-intensive sectors, such as aeronautics, IT, electrical equipment and heating and air conditioning systems that have created jobs this year in the United States. In aircraft manufacturing, more than half of employees have at least a bachelor's degree, according to the Census Bureau. The semiconductor industry, an extremely complex and technical activity, also mainly recruits higher education graduates.

These jobs are therefore mainly accessible to qualified workers who have completed appropriate studies or completed demanding professional training. Most will not offer an opportunity to an unskilled worker who has lost his job following relocation. However, Trump's speech around deindustrialization, which allowed him to win the swing states of the Rust Belt, was mainly aimed at the latter. The American president, for example, promised to resurrect the coal industry.

Machine-translated from French