Tuesday, March 6, 2012
1954: Industrial Production/Manufacturing
The above chart of industrial production from the FRED system shows that industrial production did not take off until the last quarter of the year. There is a good reason for that. Remember -- the reason for the slowdown was a systemic manufacturing situation. Briefly, inventories built but demand did not. As a result, there was a manufacturing recession where most of the lay-offs occurred in the manufacturing area. The charts below help to fill in the gaps.
The above chart shows that inventories built at the end of 1953 and the inventory/sales ratio rose, peaking in early 1954. As this ratio declined, industrial production came back on line, primarily starting in the fourth quarter of the year.