(Click on image to enlarge)
Industrial Production data from the Fed, chart by MishIndustrial Production and Capacity Utilization Synopsis
In November, industrial production increased 0.2 percent, and manufacturing output rose 0.3 percent.
The increase in manufacturing output was more than accounted for by a 7.1 percent bounce back in motor vehicles and parts production following the resolution of strikes at several major automakers.
The index for manufacturing excluding motor vehicles and parts decreased 0.2 percent.
The output of utilities moved down 0.4 percent, and the output of mines moved up 0.3 percent.
Total industrial production in November was 0.4 percent below its year-earlier level.
Capacity utilization moved up 0.1 percentage point to 78.8 percent in November, a rate that is 0.9 percentage point below its long-run (1972–2022) average.
Industrial Production Index(Click on image to enlarge)
Industrial Production Index Details
Manufacturing durable goods peaked at 129.8 in January of 2023. It is now 120.3, a decline of 7.3 percent.
Motor vehicles peaked at 114.8 in August of 2023. It is now 105.9, a decline of 7.8 percent.
Total manufacturing peaked in October of 2022 at 101.2. It is now 99.7, a decline of 1.5 percent.
Industrial production peaked at 103.5 in September of 2022 at 103.5. It is now 102.7, a decline of 0.8 percent.
The overall numbers are buoyed by aircraft and parts, up nine consecutive months (first chart).Industrial Production Year-Over-Year(Click on image to enlarge)
Industrial Production Year-Over-Year Details
Industrial production year-over-year is down 3 consecutive months.
Manufacturing is down 9 consecutive months.
Aircraft and parts is up 20 consecutive months holding everything together.
Industrial Production Index Since 1972(Click on image to enlarge)
The Big Picture
The Industrial Production index peaked at 104.1 in August of 2018. It is now 102.7, down 1.3 percent in the last five years.
The Manufacturing Index peaked at 106.4 in December of 2007 at the onset of the Great Recession. Sixteen years later the index is 99.7, down 6.3 percent.
Who needs manufacturing when we can make $20 per hour flipping burgers at a McDonalds in California?The Fed Pencils in 2-3 Rate Cuts in 2024, the Market Expects 4-5
On Wednesday, I noted This was a very dovish flip and totally unwarranted by the data.Huge Moves in the Yield Curve This Year, What’s Going On?Also see Powell’s own statements regarding how long inflation may remain above target are not in line with it’s forecast. I will have more on this in a subsequent post.More By This Author:Is There Such A Thing As A “Crucial Market Prediction?”EU Integration Stopped And Is Now Headed In Reverse The Fed Pencils In 2-3 Rate Cuts In 2024, The Market Expects 4-5
