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Wednesday, October 17, 2012

Industrial production and more retail sales

Check out the latest chart of industrial production (IP).

There was a bit of an uptick in the latest report.  The prior month was quite a dip and was revised slightly lower.  That begs the question is this uptick real or will it get revised lower next month?  Lets look at it as a percent change chart next.

The year over year data shows the rate of change continuing to slow down.  The rate of change is at a similar level to where it was right before the last recession.  However, it stayed that way for years in the middle of the last decade without indicating a recession.  We will have to see what happens next month.  A sustained upturn in IP would be a good sign we are not in recession at the moment.  If we get another plunge like we did in Aug. it would likely signal we are in recession.  A slightly negative report might still be inconclusive.

For the retail sales data, I ran into some interesting facts courtesy of Bespoke.  Check the following table and chart.

So the biggest changes in the sales data were in electronics and gas stations.  The increase in money spent on gas is usually bad for the economy, not good.  The change in electronics can be explained by the next chart.

Even though the IPhone5 came out late in the month, it probably was the big driver of the increase in retail sales.  I would say the surge in sales was not really a sign of a strengthening economy.   There might be a decline in sales for Oct. given there probably won't be the same demand for IPhone5s this month.  I guess if we got a new IPhone model every month the economy would be great.  It is interesting how one company can have such a big impact.

We will have to see what happens next month with these pieces of data.  Even though they were positive for Sept. I don't think it is safe to say the economy is truly on an upswing yet. 


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.