Yesterday, the ISM reported that U.S. manufacturing expanded for the fifth straight month. The PMI hit 54.0 — the highest reading since May 2022. New orders surged. Production accelerated. By every measure of output, American factories are humming.

But buried in the same report is a number almost nobody is talking about. The ISM Employment Index came in at 48.6. Below 50 means contraction. That makes 32 consecutive months of manufacturing employment shrinking — the longest streak since the financial crisis. Factories are booming... and not hiring.

Zoom out and the picture gets even more striking. In 1979, 19.5 million Americans worked on factory floors. Today it’s 12.6 million — nearly 7 million fewer — and output is at a four-year high. The math is simple: automation, robotics, and software did what hiring used to do. The average manufacturing job now pays $135,500 a year because the ones that are left require engineering skills, not a strong back.

This is good news for factory margins and for anyone holding industrial stocks. More output per worker means better earnings. But it means something else, too: the old promise that “bringing factories back” would bring millions of jobs back was always about a different era. Today’s factory runs on sensors and software, not headcount.

The factory is coming back to America. The factory job, as your father knew it, is not.

If you own industrials or index funds, this trend is working in your favor — fewer workers, fatter margins. But if you’ve got a grandkid trying to figure out what to do after high school, show them this chart. The jobs that pay $135,000 a year in a factory aren’t on the assembly line anymore. They’re in the control room. That’s worth a conversation this week.