August 20, 2024
US industrial production dropped by 0.3% in July over the month after being unchanged in June and by 0.2% over the year. 3-months moving average has been demonstrating a positive dynamic from the start of the year recovering from the bottom of -0.33% in January to the top of 0.36% in June. Today’s data breaks this uptrend bringing the 3-month moving average to +0.16% and showing further decline is possible (see chart).
Yearly indicator has been creeping below zero from January to April and then inched up to positive territory in May and June (see chart). Today’s data indicates its weakness to show expansion. Data is a negative signal demonstrating difficulties in this sector of the economy and adding to fears about coming recession.
However, industrial production is not prevailing part of the economy in which consumers play a leading role. Taking into account recent data showing sharp rise in retail sales the hope that recession will ebb persists.
⭐️Summary:
Industrial production shows weak results for the most part of the year and that is a negative sign signaling looming recession. However, as its part in the economy is not prevailing the hope persists that consumers will do their job properly to keep the economy on the surface as inflation ebbs and rates are going to be cut.