Industrial production is below the January 2008 level. Manufacturing is even more abysmal.
The Fed’s Industrial Production and Capacity Utilization report for November provides another set of sobering statistics.
- Industrial production (IP) moved down 0.1 percent in November after declining 0.4 percent in October.
- In November, manufacturing output rose 0.2 percent, boosted by a 3.5 percent increase in the index for motor vehicles and parts.
- The indexes for mining and utilities fell 0.9 percent and 1.3 percent, respectively.
- At 102.0 percent of its 2017 average, total IP in November was 0.9 percent below its year-earlier level.
- Capacity utilization stepped down to 76.8 percent in November, a rate that is 2.9 percentage points below its long-run (1972–2023) average.
Industrial Production Percent Change Month-Over-Month
It’s not easy to make sense of monthly numbers due to extreme swings month-to-month especially in autos and aircraft.
In October, November, and December, Aircraft production is down 11.3 percent, 11.3 percent, and another 4.4 percent in December.
The last four months for motor vehicles and parts are -9.9%, +9.1%, -5.4%, and +3.5% in December.
Industrial Production Components Percent Change Year-Over-Year
Year-Over-Year IP Numbers
- Industrial Production: -0.9 Percent
- Manufacturing: -0.9 Percent
- Motor Vehicles and Parts: -3.5 Percent
- Aircraft and Parts: -23.5 Percent
- Consumer Durable Goods: -4.3 Percent
- Manufacturing Durable Goods: -9.6 Percent
The Inflation Reduction Act, cleverly timed to keep things humming through through the election, helped pad demand for manufacturing durable goods, now crashing.
Trump Proposes Killing the $7,500 EV Credit
This would reduce demand for EVs when Ford and GM are already taking huge hits on EV production.
Let’s recap how this year in EVs has progressed.
April 4, 2024: Ford to “Re-Time” New EV Production, Expand Hybrid Production
Today Ford announces a two-year delay, “retiming” until 2027, on new EV models scheduled for 2025. In addition. Ford will focus on a full line of hybrids.
April 26, 2024: Ford Loses $132,000 on Each EV Produced, Good News, EV Sales Down 20 Percent
Ford (F) reports a huge loss on every EV. Sales are down 20 percent holding the losses to $1.3 billion.
August 21: Ford Cancels Plans for Electric SUV, Expects a $1.9 Billion Loss
Say goodbye to a vehicle that never should have been conceived in the first place. Customers don’t want it.
Hoot of the Day: Ford Wants Stricter Tailpipe Emissions
Here’s my flashback hoot of the day that I forgot about.
May 26, 2024: Hoot of the Day: Ford Wants Stricter Tailpipe Emissions
Ford has gone to courts, siding with Biden to defend the EPA’s rules on tailpipe emissions!
Hello Ford, please note Trump Proposes Killing the $7,500 EV Credit and Seeks Tariffs on Battery Materials
Kiss Biden’s ridiculous energy policies goodbye. We won’t miss them.
The transition team recommendations would allow automakers to produce more gas-powered vehicles by rolling back emissions and fuel-economy standards championed by the Biden administration.
The transition team proposes shifting those regulations back to 2019 levels, which would allow an average of about 25% more emissions per vehicle mile than the current 2025 limits and average fuel economy to be about 15% lower.
I don’t understand the case for rolling back goals we have already achieved, but perhaps I am missing something. Is 2019 a policy trial balloon?
However, team DOGE has no authority to do anything but make recommendations.
For example, DOGE wants to eliminate the Department of Education. Great, but this is an idea that been circulation for at least a decade by Ron Paul and others.
To Do and Undo
It’s much easier passing something than undoing it. Let’s see if we can even do something seemingly simple like killing EV subsidies.
Since EV subsidies are part of the Inflation Reduction Act, let’s see where that idea goes and how fast, especially with Ford and GM howling all the way.
So, color me skeptical until DOGE comes up with ideas we have not already heard about for the last 10 years, and then Congress actually votes on them, and Trump signs them into law.
An Interactive Exercise: What Would You Do to Balance the Budget?
On December 4, I offered An Interactive Exercise: What Would You Do to Balance the Budget?
I balanced the budget. Team DOGE hasn’t. But my proposals have the same philosophical issue.
It’s easier to do something than undoing it. Cutting the budget is mostly a case of raising revenues or undoing something that’s already done.
Good luck with that.
But one thing Trump can and will do is kill Biden’s EPA mandates. Consider that part done over the howls of Progressives like AOC and Elizabeth Warren.
The world never recovered from the GFC, it’s been stagnation ever since, and more recently deflation, and that looks set to evolve into a long depression, due to the weight of global debt and the weakness of demographics in the developed world.
Trump promised to default on the national debt and reduce our obligations to pennies on the dollar. That would be great! What are they going to do? Kick us out of our homes? Ha.
The Fed sees no recession in sight through the end of 2025 (!!) and sees the unemployment rate falling between now and the end of 2025 (!!!).
t’s not easy to make sense of monthly numbers due to extreme swings month-to-month especially in autos and aircraft.
I agree why not use year to date numbers
That is why I provide year-over-year numbers
What is the worldwide future for passenger vehicles?
ICE, EV, PHEV?
What is the worldwide future for delivery vehicles, including semis?
Diesel, CNG, EV?
What is the worldwide future for self-driving, or autonomous vehicles? Will they become the standard, and if so, when? And who will dominate this field?
The mix, ICE, EV and PHEV depending on usage and geography: country, city or rural.
For future PHEV platform, see BYD Shark: no axles, no differential, no transmission ,small gasoline engine to recharge the batteries.
Good post. Thanks.
Maximus: WOW, that is actually super interesting news. I would say, and I am not sure, but I told my wife YEARS AGO (6??) that the best design idea SHOULD be that you use a BRIGGS AND STRATTON LAW MOWER ENGINE producing 1.5KW of output Energy (as opposed to our 12KW on-board Diesel Generator in our Marathon Diesel Pusher RV).
Then, have lunch at a truck stop or where ever and run that tiny engine, sipping fuel, to recharge the EV thrust batteries.
BYD DID IT! Why did it take the CHINESE to implement that first?
ICE has been in the world for over hundred years. It has been shaping for decades
and mature long ago. It can’t be improved significantly and can’t be reduced price
but seems rising.
On the other hand, EV is just starting only a decade or so and shaping. Even with a
short period of time it is competing well with ICE.
To me, EV will knock out ICE in a few years or a decade time.
Agree. Though I think PHEV has a role to play as well.
EV is NOT a new technology. EVs have been around longer than ICE, and were abandoned because they were inferior. Their viability in recent years was owing to subsidies, and was promoted because of fears of fossil fuel shortages and talk by politicians of banning ICE. They won’t “knock out” ICE even in Europe where they had planned to ban them by the 2030s (they’ve backpedaled on that).
True. But today’s EVs are nothing like the first EVs. A lot of what goes into EVs today IS new technology. New battery tech, computers, regenerative braking, self-driving tech etc. In particular, EVs are the focus of self driving tech as they are easier to control.
And as the technology keeps improving, it might change which vehicles dominate in the future.
Time will tell.
Horses and elephants are going to make a comeback – got hay?
I hope the rollback eliminates that “start-stop” silliness we have on vehicles now. What a mess and many cars now need two batteries to deal with
“I don’t understand the case for rolling back goals we have already achieved, but perhaps I am missing something. Is 2019 a policy trial balloon?”
The answer is simple, the cost to benefit of current standards does not make sense. Let’s roll back safety and emission standards to circa 2001 and freeze them for 20 years and watch as cars become more reliable and more affordable again. If I could buy a new 2003 Tundra instead of a new 2025 Tundra I would in a heartbeat. Because I can’t, I will probably never buy a new car again. I hate them and all of the stupid and worthless feature that regulations require. Regulations are destroying the internal combustion engine and have reduced my appetite for a new car to zero. And this is from a car guy who bought his first Road and Track magazine in 1973.
Exporting debt will be the theme of the United States in the 21st century.
Well, the first part anyway.
Industrial Production Index has been in a sideways range for the past 16 years. That’s quite a macro trend.
We are officially in a shadow war against not only Russia but China. A lot of stuff is going to come out in the coming weeks about everything that has gone on behind the scenes.
“We are officially in a shadow war against not only Russia but China”.
Not only Russia and China but all of global South. eg. Bengladesh, India,
Syria and many more are coming.
You might be in a war against Russia, but Russia is not in a war against you.
China, on the other hand, is a fat drowning leftist in a fight for survival, so watch yourself, you may get pulled in as you are a fellow commie.
I remember during the Financial Crisis Elizabeth Warren, aka Hiawatha, was buying properties and flipping them like pancakes. Hey AOC, get me a gin and tonic!
Warren excused the murder of the ceo last week. The worst of people
So did Bernie. Oh its terrible, but … Now you know why sentencing for violent crimes against government officials are stricter than those against civilians …
Sobering indeed. What a disaster
I guess this was unexpected since the GDPNow forecast decreased today to a positive 3.1% real GDP increase for the 4th quarter?
Was busy all day with appointments, Have not had a chance to look at GDPNow details. But clearly IP mattered more than very hot retail sales numbers. I am skeptical of the auto sales.
I don’t completely understand why you are skeptical of the auto sales. Didn’t the BEA report similar growth in November new vehicles sales YOY a couple of weeks ago?
How convenient as the fed is going lower rates once again tomorrow.