From RealMoney.

 ... The value of U.S. manufacturing output in real terms (adjusted for inflation) was a little more than $3 trillion in 2008. That is up from $1.2 trillion in 1972. If the U.S. manufacturing sector were a separate country, it would be the world's fifth-largest economy (behind the rest of the U.S., Japan, China and Germany). The U.S. remains the world's largest manufacturer. Full stop. ...

Before the end of this business cycle, the real value of U.S. manufacturing output was never higher. If that is true, why is it that we can go into a store and have difficulty finding goods produced in the U.S.? The simple answer is that many of the goods that are manufactured in the U.S. are not finished consumer goods. Often they are parts or components that may be exported and further processed or assembled abroad, often in affiliates of U.S. multinationals, and capital goods.

Metals, minerals and chemical products are the largest U.S. manufacturing sectors, but you are not going to see them in Wal-Mart or Tiffany's. The U.S. also manufactures motor vehicles and other means of transportation, foodstuffs, computers and electronics, machinery, appliances and furniture. ...

Output per manufacturing worker has roughly tripled since the early 1970s and doubled since the early 1980s. Today it stands just shy of a quarter million dollars per worker. For the past decade, what economists call multifactor labor productivity has risen at an average annual rate of 4.6%. This is nearly two-thirds faster than overall non-farm productivity growth.

The number of manufacturing workers fell by 30%, and output per worker grew three-fold. How could that happen? Technology, broadly understood, is the key. On one hand, we have organizational and conceptual advances, such as continuous improvement, and lean techniques, including concepts learned from others, such as just-in-time inventory management.

On the other hand, investment has boosted the amount of capital per worker. The stock of capital per manufacturing employee has more than tripled in the last quarter century. Simply put, manufacturing has increasingly become capital-intensive rather than labor-intensive.