I’ve been nervous about several indicators (a reminder below), but the gain in Manufacturing Production is comforting. Reminder: Industrial Production, the headline number, includes the output of utilities as well as manufacturers and mines. Because utility output swings with the weather, total industrial production is not a good measure of the economy; manufacturing production is the better gauge.
It appears that manufacturing has emerged from its slump. It’s not setting any records for growth, but at least it’s moving up rather than down. The data here confirm the purchasing managers report issued earlier in the month:
Now a reminder about what I’ve been worrying about: consumer spending has been growing very slowly, with car sales down. Business orders for capital equipment have slid. These negatives are on top of the lousy housing sector. The news has not been so bad that I forecast a recession, but this economy does not have much margin for error right now. So today’s news is quite welcome.
