Fed Report on Industrial Production: Another Manufacturing Recession?

By at 16 November, 2019, 1:18 pm

by Raymond J. Keating

There was nothing positive in the Federal Reserve’s latest report on industrial production, as the recent skid in industrial production, including manufacturing output, got worse.

Industrial production (i.e., the real output of the manufacturing, mining, and electric and gas utilities) in October declined by a whopping 0.8 percent, and that came after a decline of 0.3 percent in September. Industrial production has been negative in three of the last four months. During the first ten months of 2019, industrial production has been negative in six months, with an additional month of no growth.

As for manufacturing production, which is the biggest chunk of industrial production, it fell by 0.6 percent in October, has been negative in three of the last four months, and negative in seven of the ten months of 2019.

Compared to a year earlier, industrial production in October was down by 1.1 percent, and manufacturing output was off by 1.5 percent.

Source: Federal Reserve Bank of St. Louis, FRED

When you look at the recent history of output data (see above), it’s clear that manufacturing was hit extremely hard during the late-2007-to-mid-2009 major recession, and suffered a manufacturing-specific recession from late 2014 to mid-2016. Unfortunately, the 2019 data point to the return of a manufacturing recession.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


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