Tuesday, December 15, 2009

Feeble Recovery Ongoing

Well, it's feeble, but it's there.

Industrial production increased 0.8 percent in November after having been unchanged in October. Manufacturing production advanced 1.1 percent, with broad-based gains among both durables and nondurables. ... At 99.4 percent of its 2002 average, total industrial production was 5.1 percent below its level of a year earlier. Capacity utilization for total industry moved up 0.7 percentage point to 71.3 percent, a rate 9.6 percentage points below its average for the period from 1972 through 2008.

Utilization, however, is scary. That's a long-term problem (see chart at the link) which has not been helped by "free trade." At ~70%, it's bite-the-fingernails time for a lot of industry; the last "good times" were in the mid- to late- 1990's.

HT: Calculated Risk


J. Strupp said...

It's only scary if we continue to not put a portion of that additional capacity to use and it's only a long term problem if we let the private sector, by itself, pull us out.

J. Strupp said...

BTW, the term "recession within a Depression" seems to becoming more of a possibilty as the days go bye. It's tough to put a positive spin on an uptick in fundamentals when so much is wrong in the world of global finance: