Industrial production in April looks great!  - until you account for the March revisions

– by a New Deal Democrat

The second of the three significant economic releases this morning was industrial production in April, and here the revisions were very important.

In April, total output rose 0.5% from March, but March itself was revised down by -0.5%, so the net result was unchanged. Industrial production rose 0.9% from March, but March was revised down by -0.6%, for a net increase of 0.3%:

Both indicators remain below their respective peaks in September and October 2022, by -0.5% and -0.9% respectively.

On a year-over-year basis, total output (including mining and utilities) rose just 0.2%, while manufacturing output fell -0.8%. Here’s how that compares to the last 50 years:

Usually, this kind of year-over-year decline in output is associated with a recession, or at least a slowdown. Because so much manufacturing was moved overseas in the early 2000s, keep in mind that we had sharp declines twice in the last decade before the pandemic without the economy going into recession.

That’s because consumer income and spending held up well. But as we saw from this morning’s retail sales report, that hasn’t been the case over the past year.

As manufacturing output goes into sales or inventory, it also gives us an idea of ​​actual manufacturing and trade sales a month before the official count comes out. I will update this once the nominal number for March is announced later today.

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