Tuesday, December 15, 2009

Industrial Production -- another V-sign

Industrial production has surged at a 9.3% annualized rate since the recession ended late last June. Consumers are getting back their spending mojo, and factories are gearing back up after having shut down in a panic. This is just the standard stuff of any recovery. Factories still have tons of idle capacity, but that just means that revving up production is relatively cheap and painless—no need to go out and build new plants, just turn the machinery on.


Bill said...


Any concern that the Empire State survey dropped quite a bit in November after several months of increases? Would this number have been reflected in the November ISM?

Scott Grannis said...

A series like this is usually very volatile. It's not a robust survey to begin with, so one or two months' worth of erratic moves can't be viewed as significant unless corroborated by other indicators, and I don't see any at this point that argue for a big slowdown.