Positive revisions lead to a good industrial production report in March

– by a New Deal Democrat

If March retail sales were poor, industrial production (blue in the chart below) was the least mixed on the upside. Total production increased by +0.4%, and in addition, February was revised up by +0.2% and January was revised up by +0.5%.

The not-so-good news is that while manufacturing (in red) was also revised up +0.5% for February, it was all reversed from a -0.5% decline in March:

With these revisions and additions, industrial production is still -0.5% below its September peak (a big improvement from last month’s initial -1.8%) while manufacturing production (red) is -1.2% below its peak since last October, also an improvement from the original -2.0% last month.

Both 2016 and 2019 saw larger declines than measured a month ago without a recession because output shrank so much as a percentage of the overall economy. However, it remains one of the 4 main coinciding indicators relied on by the NBER, and more often than not in the past its peak has also signaled the peak of the cycle.

After February’s nominal manufacturing sales figures for February are reported later this morning, I will make estimates on this important matching indicator in real terms as well.

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