Quality Adjustments Mask Manufacturing Decline

The BEA’s 'real manufacturing value-added' can rise even as domestic factories close because hedonic quality adjustments and deflator choices inflate 'real' output. Modest product-quality gains can be amplified into large real-growth figures, obscuring offshoring and shrinking physical production. Policy debates anchored in this series may be misreading industrial health. — If the most-cited manufacturing metric overstates real production, industrial policy, trade strategy, and media narratives need alternative gauges (e.g., physical volumes, gross output, trade-adjusted measures).