Industrial Production: Half Full or Half Empty?

The recent reports for ISM are still showing that the economy is cooling. While we could try to find a silver lining in all of this (see below), it is still a very choppy recovery – at best.

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  • As expected, industrial production weakened in August, growing only 0.2% versus a 0.6% jump in July. The consensus called for production to increase 0.3%.
  • Although manufacturing production increased just 0.2%, that headline number was unduly influenced by a drop-off in motor vehicle production. The manufacturing sector overall looks to be in reasonably good shape at this point in the economic recovery.
  • Excluding the motor vehicle sector, manufacturing production increased 0.6% in August, well above the 0.1% growth rate in July.
    Capacity utilization increased from 74.6% in July to 74.7%