Changes in total U.S. manufacturing output and employment from 1964 to 2024
The total inflation-adjusted value of U.S. manufacturing has increased over the past six decades.
1964 - $1.8 to $2.1 trillion in manufacturing output (in 2024 dollars).
2024 - $2.8 to $3.1 trillion in manufacturing output.
Even though manufacturing’s relative share of GDP has declined, real (inflation-adjusted) output has increased, driven by higher levels of efficiency, larger-scale production, and the overall expansion of the U.S. economy.
Labor hasn't fared as well, especially since the early 1980s. Manufacturing employment increased from about 15.7 million workers in 1964 to around 19.5 million in the late 1970s, declining to around 12.8 million in 2024.
Most manufacturing in the U.S.A. depends on supplies and components sourced internationally. If maintained, the Trump tariffs will likely negatively impact what we produce in the U.S.A.leading to additional job losses in that sector.
Manufacturing output
While the role of manufacturing in the overall U.S. economy (as a percentage of GDP) has significantly declined since the 1960s, the “real” (inflation‑adjusted) output has increased. This rise in total production (when measured in today’s dollars) aligns with substantial gains in labor productivity—a fact reflected in the considerable reduction of the manufacturing workforce, with each worker producing more output than before.
In the 1960s, manufacturing output was substantial but involved a less technology-driven process. Since then, the capacity and efficiency of American manufacturing have dramatically advanced. This “more output with less labor” phenomenon is mainly due to the way technology has transformed every step of production—from the adoption of robotics to sophisticated computer‐driven process controls—enabling manufacturers to produce far more goods per worker and unit of capital than was possible in the 1960s
Inflation-adjusted output has multiplied over the decades, mainly due to technological innovation and higher capital intensity, meaning that every manufacturing dollar today represents far more goods and services than it did in 1964. Today, the manufacturing share of GDP is lower—typically in the low teens percentage-wise—even though overall GDP is much larger. Estimates indicate that today’s manufacturing value added was $2.8 to $3.1 trillion in 2024.
Manufacturing employment
In contrast, employment in manufacturing did not follow the same upward trajectory as output. In the 1960s, manufacturing served as a significant source of jobs for American workers. With the advent of automation, offshoring of specific production processes, and ongoing restructuring of the industrial economy, the sector’s headcount gradually shrank—a decline of approximately 20–25% in absolute terms. This reduction is a reflection of the dramatic gains in labor productivity: the same (or even greater) levels of output are produced today with fewer workers than were employed six decades ago.
When the nominal figures of 15 to 16 million workers engaged in manufacturing in the early 1960s are adjusted to today’s dollars (using an inflation multiplier of roughly 9 to 10 from the mid‑1960s to 2024), the manufacturing sector’s value-added comes in at approximately $1.8 to $2.0 trillion. (For example, given that the U.S. nominal GDP in 1964 was around $725 billion and manufacturing then made up roughly 25–30% of GDP, one obtains a figure in that ballpark once inflation is considered.)
The manufacturing workforce shrank from 12 to 13 million despite increased output. This juxtaposition—rising output and declining employment—is a central story of contemporary American manufacturing. The manufacturing industry in the U.S. produces more output with fewer workers due mainly to significant gains in automation and labor productivity.
Note and references
Microsoft Copilot assisted in preparing this post.
Sources include:
