Nobel Prize–winning economist Joseph Stiglitz has a poor prognosis for the state of the economy: “Not great right now,” he said on CNBC’s Squawk Pod on Thursday. “And the prospects are that it’s going to get worse.”
In a criticism of President Donald Trump’s economic policies, Stiglitz said one of the greatest threats to the precarious health of the U.S. economy was slumping blue-collar jobs, including a scarcity of manufacturing roles.
“Do you know what happened to jobs in manufacturing in the last year? They’re down,” he said. “[Trump] didn’t succeed over the last year in bringing back manufacturing jobs.”
A Joint Economic Committee analysis published earlier this month revealed 108,000 fewer manufacturing jobs last year, nearly double the estimation from Bureau of Labor Statistics data in November, which found 59,000 fewer jobs. Jobs data from February 2025 to last month shows a 166,000 total loss in blue-collar jobs, which also includes construction, mining, and warehousing. Stiglitz alluded to tariffs being a reason behind the collapse.
“The decline in blue-collar jobs is even larger,” he continued. “And you look at, where is the increase in jobs in the United States—health care. Does that have anything to do with the tariffs? No.”
(Stiglitz noted the growth of the health care sector is the result of more people growing older and is less dependent on broader macroeconomic trends.)
U.S. companies such as Ford have sounded the alarm on shortages in blue-collar labor. CEO Jim Farley said a dearth of blue-collar workers would not be bad news just for manufacturing, but also for the wider tech industry, as it would slow down data center construction.
The White House claimed early in Trump’s second term that manufacturing had come “roaring back” under his administration, with the president claiming his aggressive tariff strategy would be a catalyst for American reshoring of manufacturing jobs by disincentivizing foreign production. These efforts are now in jeopardy.
The Supreme Court ruled on Friday the Trump administration cannot impose tariffs under the International Emergency Economic Powers Act (IEEPA), setting up $175 billion in estimated tariff revenue to potentially be refunded to companies hit by the taxes and raising questions over the future of Trump’s tariff policy.
White House spokesperson Kush Desai said trillions of dollars in investments are fueling American manufacturing, reflected in a surge in specialty trade construction jobs.
“With both productivity and real wages for manufacturing workers surging, the best is yet to come as the president’s policies continue taking effect,” Desai said in a statement to Fortune.
The irony of Trump’s tariffs
Economists have warned Trump’s tariffs have not only backfired as American households and companies foot the bill for the import taxes, but the levies have also partly caused the manufacturing slump they were meant to fix.
“It is striking how soft manufacturing has been because, in theory, you put tariffs in place to protect domestic manufacturing, so that domestic manufacturing employment grows,” Laura Ullrich, director of economic research at the Indeed Hiring Lab, told Fortune in November. “And we have seen the opposite of that.”
Ullrich said the economic uncertainty tariffs have brought has disincentivized companies from hiring. A September 2025 note from Pantheon Macroeconomics analysts Samuel Tombs and Oliver Allen posited that shrinking wage growth in the U.S. was a result of firms with high tariff exposure trying to preserve slim margins by cutting labor costs.
“Oftentimes when there is heightened uncertainty, it’s just difficult for businesses and people to make decisions in real time,” Ullrich said. “And so that slows down employment. It slows down all those processes.”
Manufacturing jobs may be uniquely vulnerable to tariffs as a result of heavy taxes on intermediate goods, including raw materials like steel and aluminum that are key in producing finished goods. Tariffs on these goods can raise input costs, further pressuring manufacturing companies. When President George Bush implemented steel tariffs during his second term in 2002, steel manufacturing unemployment was depressed, even years after the tariffs were removed, a study published in November 2025 in the American Economic Journal: Economic Policy found.
“When you tax the intermediate goods, that’s going to manufacturers directly,” Ullrich said. “That’s part of what we’re seeing.”
