March industrial production only rose 0.1%. But this is a very misleading headline as
manufacturing output rose 0.9%. The difference was a 6.4% drop in output of utilities.
The decline in utilities largely reflects the March rise in temperatures and fall in heating days as the weather returned to normal after the severe snow storms of February.
Historically, recoveries have been proportional to the recessions — severe recessions have strong recoveries and mild recessions have weak recoveries. So far the recovery in industrial production this cycle looks about average. But given the depth and severity of the recessions an average rebound is disappointing.
The second aspect of the report reinforces last months signal that manufacturing productivity growth may be slowing very sharply. The monthly manufacturing productivity data is not reported, but I estimate it by dividing the output data reported by the Federal Reserve by the manufacturing hours worked data by the BLS. It is not exactly what is reported in the quarterly productivity data, but it is close enough to provide significant warnings of major trend changes and that is what the data is now showing.