Thursday, December 15, 2011

Slightly disappointing industrial production report

The Industrial Production report for November this morning was slightly disappointing, showing a modest decline when a flat report was expected. Yes, this was a disappointing report, but one data point in a data series never indicates a change in trend. Besides, the ISM Manufacturing report for November did show a production gain. Their reporting periods and sampling may not be closely aligned. Which one is more "right" remains to be seen.
 
Incidentally, industrial production is roughly at the level it was in January and February of 2005, so we still have quite a ways to go to get back to a "trend" level of production. Capacity utilization is 2.6% below its long-term average.

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