This morning the Fed reported Industrial production declined. Moreover November and December were revised sharply lower.
Industrial production decreased 0.3 percent in January after having risen 0.3 percent in December. In January, manufacturing output fell 0.8 percent, partly because of the severe weather that curtailed production in some regions of the country. Additionally, manufacturing production is now reported to have been lower in the fourth quarter; the index is now estimated to have advanced at an annual rate of 4.6 percent in the fourth quarter rather than 6.2 percent.
- Consumer goods fell 0.5%, the first decrease in six months
- Consumer durables down 2.6%
- Consumer non-energy nondurables down 0.8%
- Within consumer durables, the production of automotive products fell 5.1% and the output of appliances, furniture, and carpeting declined 0.6%
- Clothing up 0.5%
- Home electronics up 1.1%
- Paper Products down 1.0%
- Business equipment down 0.1%, a third consecutive decline
- Defense down 1.0%, a fourth consecutive decline
- Construction down 1.0% following loss of 0.6% in December
Unexpected Happens Again
- The unexpected decline in industrial production (the most since May of 2009) follows
- The unexpected decline in retail sales which in turn followed
- The unexpectedly weak jobs report in February
- Which followed a Huge Miss in ISM; Largest Decline in New Orders in 4 Years
- Which followed a Big Miss: Nonfarm Payrolls +74,000 vs. 205,000 Expected in January
Don’t worry, it’s the weather.
Economists did not know it was cold and snowy when they made all of those estimates.
Regardless, expect another lowering of GDP estimates as a result of today’s unexpected news.
Mike “Mish” Shedlock