June industrial production: second sharp monthly decline in manufacturing
June industrial production: second sharp monthly decline in manufacturing
– by New Deal democrat
Industrial production declined -0.2% in June, and May was revised downward to unchanged. Even worse, manufacturing production declined -0.5% in June, and May was revised downward to -0.5% as well:
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtXrFVg_2dQeTxer9Aw5H3_H_WizWVfjMsA_M_n6WzphPEQX74GjcFKyM8w4YBqBxp48TIik_WofivFZPgWxW5rO3KCn9xZ3P--4CV8969jgfv4neKlPSyA2BURlYgkkvvhw774-_54XxvsN6m6XvRQ2K_jVu6WFrdsWnxZTNzmON3g8CSxAfDuqo5gA/w400-h173/1BEFA3C2-145E-445F-9498-228C2D25E083.jpeg)
This corresponds to the sharp deterioration in the regional Fed new orders indexes, and the ISM manufacturing new orders index we have seen during that same time.
On a YoY basis, total production is up 4.2%, while manufacturing is up 3.6%. Compared with the last 40 years, and particularly the last 20, this remains pretty good growth:
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1gWOixBnYGOwCv76fyfdCUU3Lujhav0ZX4NqeGiQYF51OPfr7qIhl_tEegXkPj4_IaD7njuXcfZwN2LzYRdIFFHIgVgClc-m9xzWmHJfxTbED8dzfGE58nzifTWJeAAucIotoUXMfeF_PuhNq9CkqUJXxn4ik8q-3pI5Aa9DZ-TWTB0EikPdF52G05Q/w400-h170/47C020EF-907A-4C5A-AB5B-08F0BD324C7C.jpeg)
The sharp deceleration in the past two months is not good, and two recessions – 1990 and 2007 – have started from these levels, but it has usually taken an even sharper downturn to coincide with the onset of a recession.