'That's just bureaucracy': Inside Biden’s campaign to keep the factory boom going

New factories are being built across the US, and economists are giving President Biden a sizable chunk of the credit thanks to recent laws encouraging new infrastructure, clean energy, and semiconductors.

But the latest jobs numbers delivered a warning about that boom.

Friday's report showed a loss of 2,000 manufacturing jobs in July amid an overall gain of 187,000 positions across the economy. Roughly 19,000 of those new jobs were in construction, which could be due in part to all those new factories.

The mixed numbers underlined how manufacturing — a sector central to both the overall economy as well as Biden's reelection prospects — could face some bumpy roads in the months ahead with the White House keenly hoping to keep the overall trends positive through election day 2024.

Jay Timmons, the president of the National Association of Manufacturers, pointed towards two potential headwinds in an interview with Yahoo Finance: There are industry concerns around permitting and government regulations (a perpetual issue) as well as a newer sense of "confusion and consternation" over exactly how companies can get in on this new alphabet soup of Biden-signed laws.

"Those are things that really should be worked out very, very quickly because frankly, that's just bureaucracy," he said.

On this latter issue, Biden’s team promises to help. Top Biden aides have set aside time to talk with manufacturers about even the smallest details, like which form needs to be filled out and how to navigate the administration’s maze of websites around industry waivers.

"Our job is to get that information out there, to make sure that it's understandable," said Celeste Drake, deputy director of the National Economic Council.

In one notable recent example, more than 60 smaller manufacturers and industry representatives ranging from Lucid Motors to the Hawaiian Chamber of Commerce gathered with top officials from Drake to NEC Director Lael Brainard to Senior Adviser Mitch Landrieu to Council of Economic Advisers member Heather Boushey.

"There's no pathway to directly connect with them except for having these kinds of conversations and making sure we're doing everything we can to reach out to them," says Boushey, who is also chief economist for Biden’s "Invest in America" Cabinet.

Boushey and Drake recently met with Yahoo Finance to talk through the administration’s ongoing efforts.

What officials say to watch for in the weeks ahead are many similar conversations — block by block across the manufacturing sector if necessary — as they try to maximize the impact of the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act.

Biden is also facing a messaging challenge in that voters aren’t giving him credit for his economic success, but there are some signs that the mood there is beginning to improve.

Either way, the fate of manufacturing will be a key hedge against a recession over the coming 15 months. In the thinking of Biden and his team, manufacturing is also a key lever to solidifying the gains on other administration priorities — from spurring the clean energy economy to improving America's national security and making them durable for years to come.

Much of the coming focus will be around manufacturers that overlap with economic and national security concerns. For example, companies that build components of the electrical grid or semiconductors or solar panels are likely to get the some of the most attention.

The overall question, as Drake puts it, was "how do we intentionally build the inclusive, cutting-edge economy that we want that makes critical things here as part of a global system."

Another avenue for the administration in the months ahead, with any action on Capitol Hill facing long odds, is to use executive orders. Last week, Biden himself traveled to Maine to sign a manufacturing-focused order that aims to spur more manufacturing-related inventions in the US by focusing how federal money for manufacturing R&D is used.

The order also puts new restrictions around keeping the fruits of these inventions in America, with Biden saying last week, "For the longest time, I’ve been told to give up on American manufacturing [but] I’ve never believed it and we have the tools to change it."

In a Yahoo Finance Live interview Friday, acting Secretary of Labor Julie Su downplayed the manufacturing decline in June's jobs report and focused instead on construction gains.

Of the Biden's administration's involvement in the sector, she said: "We are just beginning to see the impact of this investment on the ground."

Experts like Morgan Stanley are also offering Biden credit as they project that a soft landing for the economy is largely thanks, they say, to government investments in areas like infrastructure.

As Timmons notes, government red tape remains a bit of a sore spot for the sector but conversations with the administration continue.

While permitting reform was addressed in a limited way in May’s debt ceiling deal, larger efforts on Capitol Hill around the issue have proceeded only in stops and starts and will have to wait until at least the fall with lawmakers currently scattered across the country for their summer recess.

Overall, Timmons says the high political stakes around manufacturing means he doesn’t see Biden's focus on his sector going away anytime soon.

"The good news is I think the administration really is listening," he told YF, adding "and there's a reason for that. They want manufacturing to succeed in the United States."

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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