Like retail sales, motor vehicles lead the way in industrial production – by New Deal democrat As with retail sales earlier this morning, motor vehicle production is playing an outsized role in expansion this year. Industrial production as a whole rose 0.3% in September. But August was revised down by -0.2%, so on net it increased only 0.1%. Similarly, manufacturing production rose 0.4%, but with a -0.3% revision to August, was also only up 0.1%. Here’s what both look like for the past two years, normed to 100 as of production’s most recent prior peak last September: On a YoY basis, industrial production is only up 0.1%, while manufacturing production is *down* -0.8%: In the past, this would have almost always have meant recession. But
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Like retail sales, motor vehicles lead the way in industrial production
– by New Deal democrat
As with retail sales earlier this morning, motor vehicle production is playing an outsized role in expansion this year.
Industrial production as a whole rose 0.3% in September. But August was revised down by -0.2%, so on net it increased only 0.1%. Similarly, manufacturing production rose 0.4%, but with a -0.3% revision to August, was also only up 0.1%. Here’s what both look like for the past two years, normed to 100 as of production’s most recent prior peak last September:
On a YoY basis, industrial production is only up 0.1%, while manufacturing production is *down* -0.8%:
In the past, this would have almost always have meant recession. But since the China shock in particular, manufacturing in particular is no longer a big enough share of the economy to cause a downturn on its own:
Motor vehicle production has been playing an outsized role in the recent improvement. In September motor vehicle and parts production rose 0.3%. Below I show it normed to 100 as of its 2017-2019 average. Production declined as much as -80% during the months immediately after the pandemic hit, and averaged -14% for all of 2020 and another -8% in 2021 before returning to 100% beginning in April 2022. Only since April of this year has production been significantly higher, noting that it has slightly below its July peak:
On a YoY basis, motor vehicle production is up a very strong 7.0%:
This despite the strike that began late last month.
It may not be that hyperbolic to say that, but for the motor vehicle industry, the economy would be in recession.
Industrial production improves, with help from vehicle production: travelin’ man edition, Angry Bear, New Deal democrat