The U.S. has lost thousands of manufacturing jobs this year, analysis finds

Manufacturers in the U.S. are cutting thousands of jobs even as President Trump pushes economic policies that he says will revitalize the industry.

Employers shed 12,000 manufacturing jobs in August, while payrolls in the sector have shrunk by 42,000 since April, according to a new analysis from the Center for American Progress (CAP) that draws on government labor data.

The nonpartisan policy institute attributes that decline to the Trump administration's steep new tariffs; hardline stance on immigration; and the Republican-backed "big, beautiful bill," a tax and spending package enacted by Mr. Trump in July that CAP says hurts renewable energy companies by phasing out certain tax credits.

For all of 2025, manufacturing employment in the U.S. has sunk by a total of 33,000 jobs, according to Labor Department figures. Most of those job losses have been among companies that make durable goods, such as cars, household appliances and electronics. The drop comes as hiring overall has slowed sharply in recent months, with employers adding only 22,000 jobs in August, well below forecasts.

The number of manufacturing jobs in the U.S. has declined for the past six decades, according to data from the Federal Reserve Bank of St. Louis. In 1960, manufacturing represented about 34% of total employment, while the number of jobs in the sector peaked in 1970 at 19.5 million. As of August this year, 12.7 million Americans were employed in manufacturing, while the industry lost 87,000 jobs in 2024, data shows.

When Mr. Trump in April announced a range of levies on dozens of other countries, the White House said tariffs would protect American workers by reducing the U.S. trade deficit with its economic partners and spurring employers to move manufacturing jobs to the U.S.

For now, however, confusion over the scale and scope of U.S. tariffs has put manufacturers on the defensive, increasing their costs and discouraging them from hiring, economist Sara Estrep, one of the authors of the CAP report, told CBS MoneyWatch.

"Companies are uncertain about what's happening," she said. "Everything has been changing on a day-to-day basis, so it's not clear what production should look like. That's why they aren't hiring."

In August, for example, farm equipment giant John Deere cited tariffs in announcing that its sales and operating profits had dipped from a year ago. In an earnings call, an executive with the company noted that it had racked up roughly $300 million in tariff-related costs, including on steel and aluminum imports. John Deere also announced it was laying off more than 200 workers at plants in Illinois and Iowa, according to AgWeb, a trade publication.

Automakers pointed partly to tariffs in announcing nearly 5,000 job cuts in July, according to outplacement firm Challenger, Gray & Christmas, while it noted that the retail sector has also stepped up layoffs and store closures because of economic uncertainty.

Another factor fueling uncertainty for manufacturers are the ongoing legal challenges to the Trump tariffs, making it hard to plan and invest for the future, according to experts.

A federal appeals court in August ruled that Mr. Trump unlawfully invoked the International Emergency Economic Powers Act, or IEEPA, to impose sweeping tariffs on U.S. trade partners. Mr. Trump on September 3 asked the Supreme Court to review the lower court's decision before it takes effect in October.

The outcome of the case leaves many manufacturers in doubt about how to proceed, making them reluctant to expand their workforce as they seek to control costs, Daco told CBS MoneyWatch.

"The slowdown is symptomatic of an environment where purchasing managers are all under stress, and they are being squeezed by higher costs of goods and reduced demand," said EY-Parthenon chief economist Gregory Daco. "And so in that squeeze, they are having to find ways to offset the higher costs, and one of the avenues to do that is to streamline their operations and make sure that they only have the essential talent on hand."

The White House did not respond to several requests for comment on CAP's findings. The Office of the United States Trade Representative and National Association of Manufacturers, a trade group, didn't immediately respond to a request for comment.

The Trump administration's crackdown on U.S. immigrants is also weighing on hiring in manufacturing, said Daniel Altman, an economist and author of the High Yield Economics newsletter.

"Immigration has been an important source of employment in manufacturing for some industries, and if you take away some of their labor supply, that's just gives them more incentive to pursue automation and other forms of capital intensive manufacturing," he told CBS MoneyWatch.

The government stepped up its campaign last week when Immigration and Customs Enforcement agents detained 475 immigrants, most of them Korean, at a Hyundai plant in Georgia because they were suspected of living and working in the U.S. illegally.

Border patrol agents have also conducted raids targeting immigrants working in retail, according to CBS News. In sectors like farming, food processing and construction, undocumented immigrants make up to 20% of the workforce, according to Goldman Sachs.

White House "border czar" Tom Homan on Sunday said the White House will expand such efforts.

"We're going to do more worksite enforcement operations," Homan told CNN. "No one hires an illegal alien out of the goodness of their heart. They hire them because they can work them harder, pay them less, undercut the competition that hires U.S. citizen employees."

Other long-term factors that go beyond the Trump administration's policies are also contributing to the ongoing contraction in manufacturing jobs. During the pandemic, manufacturers invested heavily in technologies to automate their operations, Altman noted.

"We've seen a lot of automation, which mean companies do not need as many workers to provide the same output," he told CBS MoneyWatch. "Output per worker has been increasing, and when we see that kind of increase in labor productivity, it usually means workers have access to more capital, or better technology or both, and that's what you'd expect with automation."