- by New Deal democrat
Industrial production is much less central to the US economic picture than it was before the “China shock,” but it remains an important if diminished economic indicator, particularly since the month it has peaked in the past has typically been the month the NBER has chosen as the economic cycle peak.
In January, headline industrial production (blue in the graph below) rose 0.7%, establishing another new post-pandemic high (although it remains below its 2018 all-time high). Manufacturing production (red) increased 0.6%, and was the highest since October 2022:
Recently the issue of utility production, which has been supercharged both by the needs of crypto mining and AI data center construction, has become important to the overall numbers. This increased another 2.1% in January to another all-time record:
This was a 0.7% increase YoY.
There has been all kinds of evidence from the regional Fed reports, and to a lesser extent the ISM manufacturing index, that production has been rebouding since the fall. This morning’s report was powerful further evidence of that rebound. A big caveat, particularly with the impact of tariffs, is how much of this broader rebound, like utility production, is contingent on the AI data center Boom continuing.
