Friday, December 15, 2017

Industrial production for November 2017: Dear Doomers, you can shut up about "soft" vs. "hard" data now

 - by New Deal democrat

For months and months this year, the mantra of the Doomers was that the "soft data" of the Fed regional surveys and ISM manufacturing wasn't being confirmed by the "hard data" like industrial production.

Meanwhile, those of us who actually know something about leading vs. coincident data placidly kept noting that the new orders data for both leading indicators (the Fed surveys and ISM manufacturing) portended strength -- just as in early 2016 they turned from negative to positive, accurately portending the end of the shallow industrial recession.

And here is Industrial Production (red), and its manufacturing (blue) and mining (green) components through November:

Yes, it doesn't move in a straight line. In particular there were several months of hurricane-related weakness. But the leading surveys have once again been proven correct, and those who listened to the Doomers wrong.