Illustration: Eniola Odetunde/Axios

The manufacturing industry got a huge boost from President Trump's election, seeing a groundswell of job gains during his first year in office. But the trade war with China has undone that progress: Jobs in the sector have stalled out and turned negative in 2019.

Why it matters: Reviving American manufacturing was a central tenet of Trump's 2016 campaign, and the industry's retrenchment shows how another Trump constituency is being punished as a result of his trade war. (The nation's farmers are also struggling mightily.)

By the numbers: In Trump’s first 30 months as president, manufacturers added 499,000 jobs, some 314,000 more than were added in President Obama's last 30 months on the job — a 170% increase.

  • That seemed to put Trump in position to fulfill a central campaign promise to "bring back" manufacturing jobs in the U.S. — jobs that Obama said would never return.

Yes, but: That progress has evaporated this year. Manufacturing employment has slowed, and in October employers cut jobs in the sector by the highest number in a decade.

  • October's purge was blamed largely on striking auto workers, but it followed a clear trend in the industry.
  • Over the last six months, manufacturing has lost a net 23,000 jobs, and average hours worked has fallen to its lowest level in eight years, according to BLS data.
  • The number of people employed in the sector also remains well below where it was in 2008.

What's happening: "Our plan is to try to hold on until the end of the year without raising prices," Gary Yacoubian, CEO of Youngstown, Ohio-based speaker company SVS Sound, tells Axios.

  • "If the tariffs remain, I’m going to have to start making moves," Yacoubian says.
  • "Meaning: the consumer will pay, and I’ll pay, and then employees will pay, if we don’t grow according to plan."

Watch this space: The Federal Reserve's latest Beige Book, which tracks businesses around the country, painted a clear picture:

  • “Several retailers reported that tariffs were raising costs and hurting profit margins," the Fed's Richmond office reported.
  • “Uncertainty generally remained elevated, driven by trade tensions, the political climate, and weaker global growth," the Dallas Fed noted.
  • “Business contacts in retail and manufacturing reported facing increased price pressures due to tariffs," the St. Louis Fed found.

What's next: Things will likely get worse before they get better, Joe Brusuelas, chief economist at tax and consulting firm RSM, tells Axios.

  • More companies are starting to face higher costs from tariffs, and those that have already been affected are starting to cut back hours and lay off workers to compensate for their losses.
  • "In order to bolster the economy [the administration] will need to roll back those tariffs, and that’s a difficult pill to swallow for Mr. Trump and his followers," Brusuelas says.

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