The monthly Employment Situation Report will always be one of our favorite releases not just because it’s so economically relevant, but because of how many interesting details there are in the data. This month, the BLS reported a very strong 31,000 net new jobs created in the manufacturing sector, with upward revisions bringing January’s total to 25,000. Over the last three months, 96,000 manufacturing jobs have been added, a far cry from the sector’s small job losses in 2016. The current ramp up in manufacturing jobs suggests that something is very different about this economic cycle.

Below we show the cumulative change in manufacturing jobs over the course of each economic expansion and contraction since the 1948 recession. Prior to the 1980s, there was a familiar pattern of huge additions to manufacturing payrolls in expansions, with big job losses in recessions. At the end of the 1970s, total payroll employment peaked out at 19.55mm. But cycles since have been different. While the mid-1990s expansion saw reasonably robust payrolls additions to US manufacturing, they were relatively small versus prior expansions. Then, in the 1990s cycle, cumulative manufacturing payrolls declined over the course of the full expansion, a result without precedent post-WW2. That was just a prelude, though. Over the full course of the 2000s expansion (6 years, from November 2001 to November 2007), manufacturing payrolls fell by more than 13% or more than 2 million jobs. That was in spite of robust expansions in aggregate employment, GDP, and stronger inflation. In fact more manufacturing jobs were lost in the 2000s expansion than any post-WW2 recession including 2007-2009! So why is this expansion different? Almost one million net new manufacturing jobs have been created, with a bit more than a quarter of those coming in the last 12 months. Manufacturing payrolls’ secular decline from 1990-2010 now appears to be over.

To see this, in the chart below we show the cumulative change in manufacturing payrolls in recessions (dark blue lines) and expansions (light blue lines). While total manufacturing payrolls are still a shadow of their 1970s self (35% below the record level from 1979), their solid gains this expansion is a big change from the last few cycles. The irony, of course, is that return to normal cyclical behavior comes just as US policymakers have shifted towards a policy that was more applicable in the last few cycles but no longer looks as necessary. We should note, of course, that US manufacturing output using monthly Fed data on real output is only 2.5% below 2008 record highs. In other words, while manufacturing payrolls went into secular decline, manufacturing output never did, as factories became much more productive.

One of the first lessons of any marketing class is that adding a “+” next to any product automatically infers that the new version is a better version of the old one.  So, while FANG was an adequate group of stocks for investors looking to get their fix of the most turbo-charged growth stocks, like every trend or fad, eventually the idea gets stale and consumers need more.  So what was a financial marketer to do?  Why not take FANG and ad a plus sign!

Enter FANG+.  While FANG was simply a combination of Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOGL), FANG+ takes those four names and adds in other favorites of the action-seeking trading community like Apple (AAPL), Alibaba (BABA), Baidu (BIDU), NVIDIA (NVDA), Tesla (TSLA), and Twitter (TWTR).  Talk about a hyper-growth investor’s dream!  Taking a look at the performance of FANG+ since its inception late last year, the index has been on quite a tear with a gain of over 34% since late October.

We ran the members of FANG+ through our Trend Analyzer tool– which is available to Premium and Institutional members — in order to see how these names stack up and how they’ve performed so far this year.  Needless to say, it’s been quite a run.  In spite of the fact that the broader market is up just slightly on the year, every stock in the FANG+ index is outperforming the S&P 500, and four of the stocks are outperforming by a magnitude of more than 10 times!  Leading the way, Netflix (NFLX) is up 64%, Twitter (TWTR) is up 47%, and Amazon.com (AMZN) is up over 30%.  Given these moves, it should come as no surprise that all three stocks are overbought.  The remaining stocks in the index are all in neutral territory, and only one (TSLA) is below its 50-day moving average (DMA).  NVDA, GOOGL, and AAPL even have good timing scores.  Shares of Facebook (FB) and Apple (AAPL) are both up less than 5%, though, so these two better get their act together!