US index of industrial production

This page is about the US Index of Industrial Production, a measure of total industrial output. The main question is where we are in the business cycle.


17 Jul 2013.

The Index of Industrial Production fell sharply during the recession, with a 19% drop from the peak in Aug 2007 to the trough in May 2009. Since then it has recovered substantially, but it is still below the previous peak. As of June, the annual growth rate was significantly below its long-term average, providing a somewhat worrying sign, that may indicate a weakening recovery. (Background)


17 Jul 2013. Both graphs through June 2013. First graph courtesy of the Federal Reserve. Click either graph for larger image.


Index of industrial production background (18 Mar 2010) The index of industrial production measures the total output of the industrial sector of the economy. From the Federal Reserve: “The Federal Reserve's monthly index of industrial production … [covers] manufacturing, mining, and electric and gas utilities. The industrial sector, together with construction, accounts for the bulk of the variation in national output over the course of the business cycle. … The production index measures real output and is expressed as a percentage of real output in a base year, currently 2002.”

The OECD standard is to include construction, however the difference is smaller than it might appear since the US index does include most construction materials.

Value added in industrial production was about 23% of GDP in 2006. The US index has been calculated since 1919; the long term CAGR (Jan 1919 to Jan 2009) was 3.3%. Revisions are small – on average 0.26%. The manufacturing sub-index is also of primary interest, however it need not be followed separately since it is very highly correlated with the full index.

Recent values (15 May 2013)

  • Previous peak: Aug 2007, 102.3
  • Previous trough: May 2009, 83.1 (down 19% from peak)
  • Apr 2013, 97.6 (still down 5% from peak)


See also