US Manufacturing Jobs Fall on Trump Tariff Initiative
By Reuters | 09 Jan, 2026

Pace of job creation fell by more than two-thirds since Trump took office, with manufacturing jobs falling for the eighth straight month as tariffs disrupt supply chains and business planning.

U.S. manufacturing jobs in December continued an eight-month skid that began last spring after President Donald Trump rolled out aggressive import taxes that he pledged would lead to a resurgence of blue-collar jobs by reshuffling world trade to favor U.S. workers.

The reshuffling has certainly occurred, with the U.S. collecting around $30 billion a month in tariff revenue, spread among U.S. consumers, importers, and overseas exporting firms, and as firms first frontloaded goods abroad to stock their shelves with tariff-skirting inventory, then slowed their purchases and brought down U.S. import levels.

But the blue-collar jobs boom hasn't materialized, adding to the soured sentiment about Trump's economic policies among households concerned about still-rising prices and uncertainty about the labor market.

Data released on Friday showed the unemployment rate  fell slightly to 4.4% in December from 4.5% in November, though estimates of job creation in prior months were revised lower, presenting U.S. Federal Reserve officials with a mixed message of a jobless rate that remains low by historic standards, but hiring trends that seem weak. 

The pace of job creation in the first year of Trump's second term has fallen more than two-thirds from what it was in the final year under President Joe Biden, to an estimated 49,000 per month in 2025 versus 168,000 per month the prior year.

The unemployment rate has increased only modestly because the number of people looking for jobs has remained flat under Trump, with tougher immigration and deportation rules and enforcement curbing what had been steady labor force growth under Biden's looser immigration policies.

But some parts of the economy have felt the pressure more than others. The Black unemployment rate has risen from 6.2% as of January, when Trump resumed office, to 7.5% the past two months. The white unemployment rate by contrast has been between 3.5% and 3.8% since April of 2024, and was below that for more than two years prior.

Hiring in manufacturing, meanwhile, has been in the doldrums. The sector lost another 8,000 jobs in December,  the Bureau of Labor Statistics estimated, and factory employment has dropped more than 70,000 since April to 12.69 million as of last month - the lowest reading since March of 2022. Construction jobs by contrast, while dropping in December, have continued the slow but steady growth seen throughout the post-pandemic era, goaded along recently by a boom in data-center investment. 

The much smaller mining and logging industry has also been losing jobs, down to 608,000 as of December versus 626,000 in April.

That was the month Trump rolled out the "Liberation Day" tariffs that, while quickly scaled back after a brutal market reaction, set the stage for an upheaval in world trade and investment patterns that is still unresolved.

The U.S. Supreme Court is expected to rule soon on a case that challenged the legality of many of the tariffs imposed under national security laws but touted by Trump as a source of revenue and meant to reclaim U.S. manufacturing supremacy. 

The path of employment since the new strategy was put in place, however, shows if anything how difficult it is to reshape labor market dynamics in a $30 trillion economy whose population is aging and in need of aging-related services, where growth is dependent on consumer spending that tends to be concentrated on services like education, healthcare, leisure, and restaurants, and whose workers command a wage premium that causes firms and managers to invest in productivity so they can make goods with fewer man-hours.

Manufacturing employment in the U.S. is now lower than it was for much of Trump's initial term, which ran from 2017 until his loss to Biden in the 2020 election.

Overall, hiring has been narrowly focused, with a measure of hiring breadth showing more industries shedding employment than adding.

The economy is generating jobs based on what people want to buy and what firms can profitably sell, and so hiring patterns haven't shifted all that much.

"Highly concentrated job growth only helps to further sideline and lengthen the job hunt for job seekers looking for work outside of the small handful of growing sectors," Laura Ullrich, director of economic research in North America at the Indeed Hiring Lab, wrote after the release of the December employment data, noting also the rise in the number of long-term unemployed, who have been looking for work for more than half a year. The number of people employed part time for economic reasons, typically read as a sign of labor market weakness, is also increasing.

"Nothing in the...data points towards significant, near-term change to this now familiar pattern," she wrote. "That said, a low-hire/low-fire environment can’t last forever in a growing economy. While a long-stagnant labor market might not be as directly alarming as an obviously broken one, it can still feel quite broken for many job seekers."

(Reporting by Howard Schneider; Editing by Andrea Ricci )