Industrial production continues to decline on a recessionary track

Lost in the noisy chaos last week was the latest Industrial Production report which showed a -1.1% decline in August, certainly pointing in the direction of a recession. Industrial production has now declined -1.5% over the past year, which is clearly recessionary for the manufacturing sector. Fortunately, manufacturing is a relative small fraction of the total economy which is now primarily a "service" economy.

Although Gustav was a factor, it is estimated that it contributed only -0.1% of the decline. The bulk of the decline was caused by a drop of 11.9% in the production of motor vehicles and parts. Ex motor vehicles and parts, the total decline would have been -0.3%.

-- Jack Krupansky