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Industrial Production Comes in OK

Posted on | November 17, 2008 Time: 3:22 pm |

Core industrial production rose 1.3% following a revised 3.7% drop in September due to the effects of hurricane season. In a further revision, the FRB updated its remarks from September to say that a full 2.5 percentage points of the Sept. drop was due to the hurricanes. The strike at Boeing (BA) has also skewed results, to the tune of .1% in October following .5% in Sept.

Excluding these drivers, The FRB estimates that in both September and October, industrial production fell by 2/3 of one percent. The October number on its own is down 4.1% YoY. By major market groups, Construction and Business Equipment saw the largest declines over the past 12 months (down 7% and 8.8%, respectively) while mining was up 1.1%.

Today’s numbers seem to be on the high end of estimates for a net-net of 1% drop or more…but I still caution against worse levels to come in future months; we’re likely to see Nov & Dec report 1% declines or more in industrial production, which would put us on track to slow down more than in either 2001-2002 or 1991.

Ryan Barnes

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