August Industrial Production rose more than expected (0.2% vs. 0%), and the July increase was revised upward by 0.5%, thus ending the slump that had persisted throughout the first half of the year. As the second chart shows, Europe's may still be in a slump, but at this point that is hardly news. Manufacturing production (top chart) also pulled out of its slump, and is up at a 3.8% annualized rate over the past six months. This is most definitely not the sort of thing you would expect to see if the economy were rolling over as so many seem to believe. Growth may not be as strong as it should be, but the economy is still growing. Continued growth, even at a relatively slow pace, puts the economy on a much better footing than the markets are giving it credit for. Pessimism is pervasive, but so far unwarranted.
I wouldn't say rejoice about the August industrial production report. When the July report was issued, industrial production was at a 94.2 level. With the "positive" August report, Industrial production is at a 94.0 level. There were more downward revisions from previous months than the increase in August.
ReplyDeleteWho does not like a dollar in trade-enhancing range?
ReplyDeleteAs the world's reserve currency, the dollar has been overvalued for generations. That had some good and bad unintended consequences.
But as an economist, I prefer a dollar trading where it "should" without actions of governments to prop it up (including many foreign government actions).
I suspect within a few years, the US will become one of the world's growing manufacturing platforms again, as China will become increasingly expensive, and Europe and Japan are already expensive.
Other Third-World platforms for manufacturing are just too corrupt, disorganized unpredictable.
Ergo, US manufacturing has a future again.
If we ever get out of this global recession.
Where did your IP data for Germany? Thanks.
ReplyDeleteSorry. Where did you pull your IP data for Germany? Thanks.
ReplyDeletelol...sorry again. Eurozone IP?
ReplyDeleteThe IP data for the eurozone comes from Eurostat, via Bloomberg (EUITEMU Index).
ReplyDelete