Tariff Doom Didn’t Show Up in the Factory Data
Cato Institute economist Scott Lincicome’s recent Bloomberg column argues that U.S. manufacturing “ended 2025 with a thud,” citing employment losses and weak survey data as evidence of policy failure. But this analysis makes a fundamental error: treating employment as the scoreboard in a labor-constrained economy.
A better scoreboard would look to output and productivity . In the third quarter of 2025, manufacturing productivity rose 3.3 percent because output climbed 2.6 percent even as hours worked fell 0.7 percent. Over the past four quarters, productivity is up 2.3 percent—the biggest gain…
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