US industrial production continues to show normal year-over-year growth

17 Jul 2012 by Jim Fickett.

The US index of industrial production shows some worrying short-term stagnation, but the more stable year-over-year change seems to preclude the ECRI view that the US is currently in recession.

Today the Federal Reserve released industrial production data through June. There is some evidence of a slowdown in growth, as output, measured by the seasonally adjusted total index, has only grown 0.8% in the last six months:

However the data tend to get fairly heavily revised in the short term, and seasonal adjustment is an art, not a science, so one should not put too much weight on the short-term changes. The year-over-year change in the not-seasonally-adjusted index is more stable, and shows a healthy level of growth, at 4.8%:

Note, in particular, that the year-over-year change in the index pretty consistently goes negative at the beginning of a recession. With the current value of 4.8%, it is very hard to believe (barring really extreme revisions) that the US is already in recession, as ECRI claims.

In sum, the short-term trend is a little worrying, but so far tentative, while the longer-term trend still shows healthy growth.