Friday, February 15, 2013

A note about industrial production

- by New Deal democrat

January industrial production was reported to have unexpectedly declined -0.1. While that isn't good, what has been lost in the story are the substantial upward revisions to November and December, shown in the graph below:

November was originally reported at 97.8. It is now 98.3. December was originally reported up 0.3 to 98.1. It is now shown as up 0.4 to 98.7.

So the -0.1 decline to 98.6 reported this morning is actually 0.3 better than the expected 98.3.

While this adds to concern that the economy is just shambling along and that the payroll tax increase and the looming sequester may be enough to derail the expansion, the revisions pretty much dispose of the claims of those who said that a recession began last July, when the industrial production index was at 97.9. I'm looking at you, Lakshman Achuthan.