Skip to main content

Industrial Production - tech propping up the numbers?

The Federal Reserve today reported Industrial Production for May. Production unexpectedly declined 0.2% from the prior month, which was worse than the forecast of a 0.1% increase. Manufacturing output was unchanged in May, the output of utilities shrank 1.8 percent, and the output at mines rose 0.1 percent. Capacity utilization slipped 0.2% to 79.4%.

The following set of graphs comes from the Federal Reserve's web site and show the relationship of high tech manufacturing to industrial production overall.

US Industrial ProductionTake a look at the middle chart, the one that shows percent change year over year. It's interesting to see that the recession in 2000 (gray highlight) and its accompanying brutal bear market in stocks did not see a dip in industrial production as severe as those seen during the 1970's and 1980's recessions.

Looking at the most recent data points in the same chart, it is also interesting to note that without the positive contribution of tech, the percent change in industrial production would now be slipping negative.

It has been documented that manufacturing is no longer as important to the general economy as it used to be. The middle chart seems to support this concept as it clearly displays the percent increases in industrial production have become narrower over time. The top chart also shows how industrial production has been somewhat flat, or at least growing very slowly, over the last decade or so when compared to previous decades of stronger growth.

It's always worthwhile to poke around in the data the Fed makes available to see what's behind the headline announcements that show up on most news sites.

Sources: Federal Reserve Statistical Release - Industrial Production and Capacity Utilization

Comments

Popular posts from this blog

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. (Click here to read the original post)

There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position.

This first post in the series starts at the beginning: getting good investment ideas.

Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets.

As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professionals and …

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. (Click here to read the original post)

With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas.

Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what to lo…

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for Jan 16, 2009

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan over 7400 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

Wait, there's more...

We also use the Alert HQ process to generate more free lists of stocks and ETFs

The first byproduct of the Alert HQ process is the Trend Leaders list, our collection of stocks in strong up-trends. These stocks are registering strong signals using Aroon analysis, DMI and MACD. They are also above their 50-day exponential moving average. This week's list is now available at the TradeRadar site on the Trend Leaders page.

As another byproduct of the Alert HQ process we have generated a list of stocks that have broken either above their upper…