The massive layoffs in manufacturing are all about Texas
The manufacturing recession is disproportionately punishing Texas.
It's no longer news that the manufacturing sector is going through a pronounced slowdown. As a result, thousands have lost their jobs. But the layoffs are especially brutal in Texas.
In an email on Monday, Renaissance Macro's Neil Dutta highlighted that the layoffs in Texas have been much more brutal than the overall total.
From his brief:
"Looks like to the extent manufacturing employment is weak, it is all about Texas. In the Lone Star State, manufacturing employment fell 42,000 over the last 12 months ending in December. In the Establishment Payroll Survey, total manufacturing employment rose 30,000 over the last year."
And so on a national scale, the manufacturing slowdown does not look nearly as bad as it does in Texas. Dutta notes that the difference would be even clearer if oil prices do not fall below recent lows (which would potentially end the steady decline in manufacturing jobs).
On Monday morning, we got a new picture of just how bad manufacturing is getting in Texas from the Dallas Fed. The Fed's overall business activity index fell to a six-year low of -34.6. The production index, which takes the pulse of manufacturing, plunged 23 points to -10.2.
Here's Dutta's chart, showing the divergence between manufacturing jobs in Texas and the sector as a whole: