Industrial Production: Down 0.3 Percent in April; 5th Straight Month of Declines; Prior Months Revised Up by a Combined 0.2 Percent

In March, industrial production as reported a month ago by the Federal Reserve fell by 0.6 percent.

The predictions for April are flat at Briefing.com and +0.1 percent for the “markets.”

Here is the report:

Industrial production decreased 0.3 percent in April for its fifth consecutive monthly loss. Manufacturing output was unchanged in April after recording an upwardly revised gain of 0.3 percent in March. In April, the index for mining moved down 0.8 percent, its fourth consecutive monthly decrease; a sharp fall in oil and gas well drilling has more than accounted for the overall decline in mining this year. The output of utilities fell 1.3 percent in April. At 105.2 percent of its 2007 average, total industrial production in April was 1.9 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.4 percentage point in April to 78.2 percent, a rate that is 1.9 percentage points below its long-run (1972–2014) average.

March’s overall industrial production decline was revised to -0.3 percent from the original -0.6 percent. But the two previous months were revised down by a combined -0.1 percent, making the net of all prior revisions +0.2 percent:

All in all, it’s slight bit of relief which might slightly reduce the expected post-revision contraction in first-quarter GDP. But it’s absolutely awful news for the second quarter’s prospects.

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Zero Hedge:

This is the 5th monthly drop in a row – the longest streak since the Great Recession. This is the 2nd weakest YoY print, at a mere +1.93%, since Feb 2010. To add to the pain, Capacity Utlization missed expectations falling to its lowest since Jan 2014 (falling the most YoY since Dec 2009) and Manufacturing production was unchanged

… And Capacity Utilization plunged to its lowest since Jan 2014… with the biggest YoY decline since Dec 2009.

A historical note: The National Bureau of Economic Research claims that the previous recession started in December 2007, and based it’s findings primarily despite many positive production and other indicators and relatively small job losses from December 2007 through May 2008 (compared to what followed during the next 18 months). Now we have the vast majority of indicators going negative, with job gains being the only positive. If this continues for another couple of months, NBER needs to take a hard look at whether another recession began in December or January.

But if we see two consecutive quarters of contraction in July’s GDP report — a possibility which cannot be ruled out at this point — I’m not going to care what NBER says or doesn’t say. It will be a recession as normal people — and voters — define it.