August industrial production: overall neutral trend continues
– by New Deal democrat
So much is imported that industrial production is much less central to the US economic picture than it was before the “China shock,” but it remains an important if diminished economic indicator. It has been trending generally sideways this year, and that trend continued in August.
Headline industrial production (blue in the graph below) rose 0.1%% in August, but after revisions to prior months, the net was a decline of -0.1% compared with the initial reading last month for July. Manufacturing production (red) increased 0.3%, but after revisions was up 0.2% compared with the initial reading for July:
Total production has not exceeded its post-pandemic high in June, but with its increase this month manufacturing production is now the highest since early 2019.
Updating my graph from Monday, mixing production (gold, left scale) increased 1.1% for the month, but remains below its June peak, while utility production (yellow, narrow, right scale) declined -0.8%:
The overall trend in the past six months remains flat to slightly increasing, after strong increases in 2024 into the beginning of this year.
Nevertheless, my conclusion this month remains the similar as it was last month, when I wrote:
“Along with retail sales, this is the second coincident positive for the economy this morning.”
Because after revisions total industrial production declined -0.1% this month vs. July, they are neutral vs. positive, but the net of both is that, unless and until consumers pull back, there is no recession.
July industrial production: meh! Angry Bear by New Deal democrat
If the glorious future of artificial intelligence plans out, if the glorious grift of cryptocurrency grifts on, then utility output, or imports, or both, are in for a healthy period of growth.
It would be really cool if AI and cryptoducats and all the power required to run then turned out to have sociable benefits.
Macro:
Computers by themselves were tried years ago in automated planning using a system called MRPII/ERP. At that time, the failure of the system was due to input errors. It did take human intervention to correct such. To give up such intervention or approval can and will lead to errors. Plossl and Wight had it correct.
The economy is not static and neither is production or planning. Too many variable inputs which are not static. There is always something in the wind. Without human intervention you give up knowledge on how things work also.
@Macro,
The word “if” is doing all the work in that post.
None of that addresses the coming cataclysm of global warming and associated resource wars.