Two cheers for a terrific February industrial manufacturing report! With a big *
– by New Deal democrat
Two cheers for the excellent industrial manufacturing report for Feburary! Complete manufacturing elevated 0.7%, and manufacturing manufacturing elevated 0.9% to the very best stage in over two years:
However the largest information is that the headline quantity wasn’t simply the very best for the reason that pandemic: it was the very best variety of all time for the reason that index was first reported over 100 years in the past:
The explanation whole manufacturing did even higher than manufacturing was all about utilities, which in January and February have been 5% increased than any earlier month ever:
So why solely two cheers and never three?
Industrial manufacturing is a coincident indicator. It was the King of Coincident Indicators, however has light in significance for the reason that flip of the Millennium, as different sectors of the economic system have grow to be extra necessary.
And the very best main indicator for industrial manufacturing is new orders. I monitor this weekly by way of the Regional Fed studies, which confirmed marked will increase prior to now a number of months, and much more considerably by way of the ISM manufacturing index, the newest graph of which, exhibiting new orders in gold, is under:
New orders spiked in December and January to the very best ranges in practically three years, however then fell again into contraction in February.
And there’s a very seemingly purpose for that: front-running tariffs. If I count on enter prices to extend sharply because of the imposition of tariffs, I’m going to finish as a lot manufacturing forward of time as I can.
We gained’t know for not less than one other month whether or not that has certainly been the case. However it’s a gigantic *, and a purpose for withholding the ultimate, third, cheer.
Maintain the Celebration on Rebounding Industrial Manufacturing, Indignant Bear by New Deal democrat
