Industrial Production Jumps 0.6% in July

The government released the industrial production report for July and the news was mixed. The good news is that industrial production rose 0.6% in July which beat economists’ forecasts by 0.1%. The downside is that industrial production for June was revised down to an increase of 0.1%.

The pickup in industrial production, the most in three months, may ease concerns that the industry that’s powered the expansion is faltering. At the same time, recessions in parts of Europe and the prospect of fiscal tightening in the U.S. are hurdles for American factories.

“There are still strong trends in the auto industry and a number of other sectors which will keep industrial production from dipping into the negative this year,” Guy LeBas, fixed- income strategist at Janney Montgomery Scott LLC in Philadelphia, said before the report.

I’m still a QE3 doubter and I think is more evidence that it’s not on its way. The crucial piece of the puzzle is jobs and that’s still not doing well.

I like to follow the industrial production report because it has a very strong correlation with recessions and expansions. Check out the chart below.

Posted by on August 15th, 2012 at 2:01 pm


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