Industrial Production Falls 0.5% in April

Since the price of gold started falling, I suspected that deflationary pressures were stronger than most people realized. Today the government reported that wholesale prices dropped by 0.7% in April. That’s the biggest drop in more than three years. March had a drop of 0.6%. A lot of the decrease is due to lower energy prices, but even the “core rate,” which excludes food and energy, rose by just 0.1% in April.

The stock market is down slightly today. The S&P 500 is currently off by 3.20 points or 0.19%. Our Buy List is fairly quiet this morning, though I noticed that Ford Motor ($F) got up to $14.44 which is another new 52-week high. The S&P 500 has gone 177 days without a 5% pullback, which is a new record for this bull market.

The Federal Reserve said that U.S. industrial production fell by 0.5% in April. That’s the biggest drop in eight months. Manufacturing fell by 0.4% which was the third drop in the last four months. Today is the mid-way point of Q2 and the consensus among economists is that real GDP grew by 1.6% for the quarter.

The really exciting market has been the Japanese Nikkei. The index just broke 15,000 yesterday. Six months ago, it was below 8,700. On the downside, the Japanese yen has fallen against the dollar, but the Nikkei is still up impressively in dollar terms. For the first time in more than 20 years, there’s actual excitement about the Japanese economy.

Posted by on May 15th, 2013 at 10:01 am


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