Saturday, March 17, 2012

February Industrial Production: Strong Gains for Business Equipment, Manufacturing, Durables

In yesterday's report on industrial production, the Federal Reserve reported that the production of business equipment increased in February for the tenth straight month and reached a new record high of 104.9 (see chart above).  Compared to February of 2011, business equipment output was 11% higher this year, and for the last two months has been above the previous record high of 104.2 set in March 2008 during the early months of the recession. 

Another highlight of the report:

Manufacturing output in February was 5.2% above its year-earlier level, led by a 8.5% increase in durable manufacturing, with strong gains in durable goods industries like motor vehicles and parts (+13.4%), aerospace and transportation equipment (+14.3%) and fabricated metal products (+10.8%).   More evidence that the manufacturing sector continues to be at the forefront of the economic recovery.

4 Comments:

At 3/17/2012 6:04 PM, Blogger Buddy R Pacifico said...

Biggest Market Group gain 2-11 -> 2-12: Transit @ 24.4%

Transit? Transit:

Civilian aircraft*
Light trucks, business,
Aircraft equipment, civilian*
Ship building and repairing,civilian*
Railroad rolling stock
Automobile, business*
Truck trailer*
Motor vehicle body*
Medium trucks*
Other transportation equipment
Heavy trucks*
Travel trailer and camper

 
At 3/18/2012 10:22 AM, Blogger morganovich said...

"More evidence that the manufacturing sector continues to be at the forefront of the economic recovery. "

this seems like an odd claim to me.

how do you square it with the fact that gdp output is above pre recession levels but industrial output has not yet even finished recovering, much less gone into expansion?

using the FEDPRO series from FRED:

2/1/12: 96.2

the peak was 100.7 in 9/07

we are still down 4.5% from pre recession levels.

INPRO dipped far more than GDP. the peak to trough drop was 17%, more that triple the GDP drop.

of course it can put up big % numbers. that's always easy after a huge drop.

imagine 2 stocks.

one drops from 100 to 50. the other from 100 to 90.

the former rallies to 60, a 20% gain, the latter to 105, a 17% gain.

which is leading the recovery?

%'s can be very misleading this way.

manufacturing has been recovering form the 2009 low, but it has not "recovered" yet in the typical economic definition (exceeding the prior peak) and has not yet moved to expansion, while reported gdp has.

thus, i'm left wondering how in can be described as "leading". that seems a misleading way to describe it.

 
At 3/18/2012 4:55 PM, Blogger bart said...

The other ugly and side:

http://www.nowandfutures.com/images/labor_share.png

 
At 3/18/2012 7:47 PM, Blogger morganovich said...

bart-

why is that ugly? if i go from farming by hand to farming with a horse and plow, i'll drop my labor component significantly.

it will up my productivity, lower my prices, and up my output.

that's greatly beneficial.

maximizing labor input as a % of production is a recipe for penury and unproductive labor.

it would involve taking shovels away from construction workers and making them use spoons. we could do better still with chopsticks.

how does that benefit anyone?

 

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