Industrial production increased one percent in July according to the Fed. Let’s discuss the numbers. 
Industrial Production Month-Over-Month Details
- Industrial Production: +0.99 Percent
- Manufacturing Durable Goods: +1.68 Percent
- Consumer Durable Goods: +2.70
- Motor Vehicles and Parts: +5.17 Percent
- Manufacturing: +0.46 Percent
- Aircraft and Parts: +1.59 Percent
Industrial Production Index
Industrial Production Index Since 1972
The manufacturing production index peaked at 106.42 in December of 2007, just before the Great Recession and has never reached a new high.
In October of 2022, the manufacturing index was 101.23, and that was the post-pandemic high.
The manufacturing index is currently 100.10.
Retail Sales Surge 0.7 Percent in July but Autos Decline 0.3 Percent
Meanwhile I am wondering about autos. Yesterday, I noted Retail Sales Surge 0.7 Percent in July but Autos Decline 0.3 Percent
Auto sales declined 0.3 percent but production is up 5.17 percent. That assumes no revisions which might be a big stretch.
Speaking of revisions, please see Housing Starts Rise 3.9 Percent in July from Still More Negative Revisions
https://www.ibisworld.com/united-states/industry-trends/biggest-industries-by-revenue/
US 10Y might rise to 7%/8%, drop to 2%/3%, before rising to 1980 high.
That’d mean double digit mortgage rates. Yurt sales would skyrocket.
1) Bidenomic might send the 10Y to 7%/8%.
2) US 10Y dropped from 16% in 1980 to zero. // 16% x 0.38% = 6%. // 16% x 0.50 = 8%.
3) Yelen will compensate u for the risk u take to get your money in the front end and the long duration. US gov real rating is far below AA+.
4) SPX 3M (quarters) with the cloud : the back of the line, 52 quarters to the left, is on Oct 2010, four bars away from Oct 2011 low. Senko B will rise all the way to 2020 low. The cloud will flip and become deep red. Those who bought at 7%/8% will benefit
from dividends and capital gains.
There may be an accordian effect happening. Companies over bought for production runs. Those that had to wait then overbought, just to be sure they to survive another supply chain disruption. Peaks and valleys in demand become peaks and valleys in production.
Off topic for this post but Hawaiian electric gapped down from $32 to$20 and now sits at$14. You could make some cash if that gap fills.
They may have more to fall if rumors of 2,000 people dead on Maui prove to be anywhere close to true.
Agriculture was once the most important sector of our economy at 90% in 1800. Now it is 1 %.
Industrial production peaked at 62% in 1933. Now its share of the economy is just 18% and still heading lower.
You can thank human ingenuity for the continuous change it which sectors contribute most to the economy.
Don’t put too much emphasis on industrial production because it is just a small part of the overall US economy.
“Now its share of the economy is just 18% and still heading lower.
You can thank human ingenuity for the continuous change it which sectors contribute most to the economy.”
You can thank money printing. As in: Massive trasfers of wealth: Away from competitive industry and existing/budding industrialists. And towards dilettantes living off of somewhere between little and less than nothing other than exactly such Fed transfers.
Building stuff is hard. Doing so competitively, much more so. Noone can continue doing that, while also having their costs inflated to the moon, in order to simultaneously keep all manners of net-negative deadweights; who are “making money” from their “home” and “portfolio” and “lawsuits” and “mandates” and what have you; in always and everywhere unearned splendor.
So, instead, the majority of what’s left of “the economy” consists of little more than the burning of the seedcorn built up back when “making money” required doing something useful, competitively.
I miss the ignore button. Then I would never have to see the sh*t that you post.
All you ever offer is bitterness and whining. What a miserable life you lead. I will just have to make a point of never reading anything you say from now on.
I recommend reading Henry Ford’s autobiography. It’s still relevant and might change your mind.
Let me break it down for all of you with an example. If you are not manufacturing then all you have left is selling burgers and insurance to each other. You have to buy your goods from other countries but they have their own burgers and insurance and don’t really need yours. They do like your natural resources though. Puerto Rico is a good example of this outcome. That has been the trajectory of this country since the 80’s.
Look at the decline of manufacturing in GDP over the years and be aware that for every manufacturing job their are 3 or more associated jobs generated to support it. The decline is even more severe when you remove the computer/software industry from the total (that sector tends to get weighted with different rules and paints a rosy picture). Now look at what replaced it –government spending (via debt). I would argue that even including government spending in GDP is wrong for a whole host of reasons. If you could separate out govt spending that actually provides a tangible value to society versus the rest of the parasitic garbage you would probably be left with something like 50% of the total. Then there are a lot of problems with the GDP calculation itself but that is another can of worms.
You finance wonks tend to have an extremely shallow understanding of
how real economies function. When the government is composed mostly of lawyers and finance peeps its no wonder the country is on this trajectory.
i think you might mean the amount of humans involved in those sectors. manufacturing and ag is still huge, but just doesn’t require armies of women and men to do the job anymore. i do agree that’s all good. however i do agree that the real story is now the ruling class in us empire is bankers and military industry, and techies, including CIA NSA……….and used to be industrialists and land owners in centuries past. the dutch empire collapsed when the financiers became the ruling class. those money printing thieves can destroy whole countries, and eventually their own. amerikan empire is crumbling under debt and endless losing wars(losing bloodand treasury funds). let’s call it the ANTI ART OF WAR
Nope.
“ In 2021, the agriculture sector contributed around 0.96 percent to the Gross Domestic Product (GDP) of the United States. In that same year, 17.88 percent came from industry, and the service sector contributed the most to the GDP, at 77.6 percent.”
https://www.statista.com/statistics/270001/distribution-of-gross-domestic-product-gdp-across-economic-sectors-in-the-us/#:~:text=U.S.%20gross%20domestic%20product%20contributions%202000%2D2021%2C%20by%20sector&text=In%202021%2C%20the%20agriculture%20sector,the%20GDP%2C%20at%2077.6%20percent.
Of course, there is a difference between agriculture and the entire food industry, which makes up 5% of GDP.
The problem with the GDP and the service sector is that includes so much crap that shouldn’t count as a positive to the economy but a negative. It’s nuts that services such as bimbos dancing on Tictoc and influencers make up a larger share of the GDP than say agriculture or metals smelting but when say the Taiwan problem goes hit which one will feed or rearm the US and which one will be just switched off.
The economy changes constantly over time. Which is why it is difficult to measure it. And there is no point in complaining about it because there is nothing you can do about it.
In 1917 the largest US companies were US Steel, Swift and Co, Armour, American Smelting and Refining.
In 1950 the largest US companies were GM, GE, Exxon, Standard Oil.
Today its Apple, Alphabet, Amazon, Microsoft.
hospitals,drugs etc………biggest after the cost of our world wide war mongering.
i concur it is impossible to really gauge what industry some company like apple is in. same with google………are they manufacturers or espionage or whatever. cloud stacks? what is impossible is to calculate the off balance sheet contingent liability of imperial over stretch. 9.11.01 was 100% blowback from our activities in mideast for decades. this ain’t complaining poppa. this is just reality. i spend everyday content and happy to be alive. life in 2023 is easy. i love looking for profitable trades in stocks and r/e and VC. keep your analysis coming. i appreciate your investment analysis. hat tip
MPO45, the Fed wants your money in the gov roach motel.
People’s money poured in the front end. Yelen wants more money, more of your
money, in the long duration. She might bow to get u.
Motor vehicles sales by mfg is up, by dealers, down. Dealers finally reached a
“normal” inventory, but today “normal”, with high interest prices and crazy prices,
is far from normal.
Dealerships are now flooded with inventory and are still adding market adjustments. I suspect new vehicle prices are going to be a lot lower this winter.
Particularly lower prices for unsold EV’s..Nobody wants them. (except for the greenies)
I think EV prices will be going down for a long time. Unlike gas cars, manufacturing costs go down every year. Tesla’s are in demand. The others are too expensive for what you get compared to a Tesla. Worldwide EV sales are expected to grow 40% this year.
With any volume of reshoring (it won’t all go to Mexico), there is hope that IP will reach a new high again in this decade.
The Fed is worried about inflation floating back up again and I don’t blame them. There have been lots of posts of velocity of money, money supply, interest rates, blah, blah, blah but lost in all of this is the fact that at a very basic level an economy is composed of people producing and exchanging goods and services.
And right now we have the producing part of the labor force depleting everyday and we will continue to see it decline for at least the next decade and the Fed can’t do anything about it. Raising rates to 20% or lowering them to -20% won’t fix the labor issue and it won’t fix disruptions to production, supply and demand. NOT GONNA HAPPEN.
I was on point that there would be an intermediary inflation reprieve and then a resurgence, now I am certain this process will repeat over and over again until something breaks.
https://www.cnbc.com/2023/08/16/fed-meeting-minutes-signal-coming-rate-moves.html
GDP Now is Q3 is 5.8%. No way. So many BS figures.
Why is it surprising? The Federal deficit at current pace will hit close to $2 trillion by the end of this fiscal year, over 7% of nominal GDP (Q3 2022’s print). If you’re gonna spend money like a drunken sailor, then it’s gonna show up in GDP.
how much of that pricing goes to wasted assets like military industrial complex? the problem in a hideous empire of never ending war is it costs so much and hidden in all the BS government numbers like GDP and their spawns of breakdowns. there is good debt like building RR and roadways for peace. and bad debt like building war machines and barracks around the globe for imperial dreams of ruling world.