Tuesday, August 17, 2010

Industrial production is steadily improving



Industrial production has been rising at a fairly rapid 6-8% pace since the middle of last year, and that is undeniably good news. It still has a ways to go to recover fully, but at this rate we'll get there by next summer. Although the pace of growth in industrial production is quite strong from an historical perspective, the depth of the recent recession would normally have called for much stronger growth and a faster recovery. That this hasn't happened explains why everyone is so gloomy these days, despite the glaring evidence that things are definitely improving. There is still a lot of "idle capacity" in the economy, from under-utilized plant and equipment to millions of workers without jobs. It's going to take a lot of time to get all that back to work, because in the meantime the economy needs to do a lot of adjusting to new realities—for example, among other things, we have to shift resources from homebuilding to whatever the next big boom industry is going to be (wish I knew). This is an ongoing process, but it takes time to become obvious.

8 comments:

brodero said...

Industrial production of business
equipment has increased 11.7% year over year...this has a strong correlation with the 3 month moving
average of the Private Payroll monthly change....there should be
future job growth with these numbers....

Beatotrader said...

You continue to IGNORE the huge SISTEMICAL RISKS
that are bigger than before Lehman-Crack...

But It's normal: people like you are like mouse in the maze that can't see outside the walls.
You are very skilled but you can't see further the schemes that you have learned and you have applied for all your life (and that made you a well-to-do person instead off 8,5 millions of your compatriots...)

Is your strength and your weakness at the same time.

I'm terrible sorry, because your deep knowledge could be better addressed...

But the U.S. citizens will realize that are becoming like South America (also from a demographical point of view...) when will be too late...
And Obama is the ultimate sign.

Forgive me if I used offensive words...

I'm leaving to Sail in Maddalena's archipelago (Sardinia): one of beautiful place in the World...
In your next Holidays come to Italy, come to Sardinia (Maddalena and Caprera) and you will be not disappointed :-)

Have a Good Fake Recovery...;-)

Beatotrader said...

http://seekingalpha.com/article/220959-industrial-production-july-up-but-june-is-now-negative?source=feed

Industrial Production: July Up, But June Is Now Negative
da SeekingAlpha.com: Home Page di Daryl Montgomery
Daryl Montgomery submits:

The Fed reported that industrial production was up 1.1% in July and this got all the media headline attention. Stocks rallied on the bullish news implying economic recovery. Buried in the coverage was that June's number, originally reported as an increase, was downwardly revised to minus 0.5%.

The government's handling and media reporting of the industrial production numbers are similar to many other economic reports. Good news is reported in the initial release. Mainstream media gives the good news big headlines and coverage that is so glowing that it is amazing there aren't cheerleaders in the background waving brightly colored pompoms and shouting "Go US economy, Go US economy, Rah, Rah, Rah" while jumping up and down. (By the way, I am expecting CNBC to steal this idea. I can see the top executives hitting themselves in the head right now and saying, "Why didn't we think of that?") The downward revisions, and sometimes there are several, that come later on and indicate things aren't so good or there is even a decline taking place get minimal and sometimes no media attention. There's no need for a propaganda ministry when the government has a deal like this with the mainstream media..........

Scott Grannis said...

If you visit the Fed's website you will see that there was NO such downward revision to the June number.

http://www.federalreserve.gov/releases/g17/Current/default.htm

Beatotrader said...

The production of durable goods rose 4.9% in the month. Output rose in almost every major category. The production of automotive products increased 9.9% in July.

This is related to the fact that General Motors kept plants running that would usually be closed for annual retooling, economists said.....

brodero said...

Daryl Montgomery....
Well known pessimist and one way thinker...

Beatotrader said...

He isn't the only one way thinker...
It's depends from direction...up or down... ;-)
& you have many one way thinker.

Bill said...

Given the size of all the new federal laws (Financial Reform is 2,000 pages!), I think my business (law) is going to do great over the next few years even if this will be bad for the country. Our financial services and tax practice partners are very happy.