Industrial Production +0.9%

We got a surprisingly good piece of economic data today. The government reported that industrial production rose 0.9% last month. That’s more than twice what Wall Street had been expecting. This is important because IP has been pretty flat for the past year. November and December were especially poor.

The boost reflected a surge in electricity generation due to last month’s cold weather, as well as higher manufacturing output to meet strong demand for new cars. But overall output has been declining over the past year, and it isn’t clear whether last month’s surge was a blip or the start of a broader rebound.

“January was just a good month in a long string of weak or mediocre months, with no assurances that the January performance has any staying power or will not be offset by a weak February,” IHS Global Insight economist Michael Montgomery said in a note to clients.

This suggests that the U.S. economy could be experiencing internal rolling recessions. So while the broader economy never fell into a recession, the manufacturing sector may have.

Posted by on February 17th, 2016 at 8:09 pm


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