Industrial Production
January industrial production rose 0.9%, with the gains with gains across almost all components.
Industrial production has now risen for seven months and is 5.5% above its bottom. This implies that so far industrial production has been rising at a 9.4% annual rate. Compared to previous industrial production recoveries this appears to be about a normal recovery. However, given that this was the most severe drop in industrial production in the post WW II era and that recoveries are typically proportional to the decline, this implies that the recovery is moderate.
The gains were widespread,but perhaps the most important development is that information technology is soaring. Over the last three months it rose 1.8%, 1.2% and 1.7%, respectively.
This translates to about an 18% annual rate, compared to about a 15% growth rate in the 2002-08 expansion.
The other major development is that manufacturing productivity appears to be slowing. Over the last three months estimated manufacturing productivity slowed to only a 1.7% annual rate as compared to an 8.1% rate over the past year. This may imply that the typical early cycle extremely strong rebound in productivity is ending and that we may now start to see stronger employment gains.
Good news for us all.
Well this is troubling. I take a day off, come back to find that a well thought out review of developemnts in an important facet of the economy has one response in comments.
The audience here has such narrow, parochial interests that an important bit of economic information that cannot readily be turned to the purpose of political spin is ignored? Yikes!
kharris,
I am afraid you are correct in a way. Lenin got all the play. And Brazelton made the day. Rebecca put spencer up at newsneconomics.
OK, I’ll be the devil’s representative.
Manufactoring was in a secular decline leading into this recession. Both mfg employment and mfg % of GDP have been trending down over the last business cycle. That was not the case in most or all of the previous recessions. So comparing the rebound from the trough may be misleading if the rebounds previously were superimposed on a secular increase in mfg vs the current situation.
That may mean that a “moderate” increase is actually a big rebound since it is fighting the secular decline rather than being aided by it.