Manufacturing Boom Defies Wall Street Journal Narrative

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Despite a Wall Street Journal headline declaring 'U.S. Manufacturing Is in Retreat,' the latest data from the Federal Reserve and Commerce Department tells a dramatically different story. Manufacturing output, business equipment production, and capital goods orders have all surged, contradicting the narrative of a sector in decline. The data reveals a fundamental disconnect between the media's portrayal and the underlying economic reality.

Why it matters

This story highlights the importance of looking beyond media narratives and focusing on hard economic data when assessing the health of the manufacturing sector. The disconnect between the Wall Street Journal's claims and the actual production numbers raises questions about the analytical frameworks used to evaluate the economy, especially in a labor-constrained environment where productivity gains may be more important than employment figures.

The details

The Federal Reserve's report on industrial production shows that manufacturing output has been advancing, not retreating. The manufacturing production index rose 2.6% year-over-year in January 2026, reaching the highest level on record. Business equipment production, a key investment indicator, surged 9.8% in 2025, the strongest increase in 20 years. Durable goods orders, a proxy for business investment, also showed broad-based gains across industries like machinery, computers, and communications equipment.

• Manufacturing output hit an all-time high in November 2025 and then broke that record in December 2025.
• Business equipment production jumped 9.8% in 2025, the strongest increase in 20 years.
• In January 2026, manufacturing delivered its first monthly jobs gain in more than a year.