Production Pullback: Industrial Production February 2008

Today, the Federal Reserve released their monthly read of industrial production showing widespread declines across industries resulting in a 0.5% decline to production with particularly significant weakness indicated in various consumer, construction and business related durables.

“Final product” consumer durable goods continue to show accelerating weakness falling 1.28% as an aggregate on a year-over-year basis, with particularly significant declines coming specifically from home appliances, furniture and carpeting which declined for the twenty first consecutive month by 9.87% on a year-over-year basis.

Construction supply production has been showing the most severe contraction to wood products seen in at least the last 20 years.

Although automotive production has been showing weakness since the middle of 2004, business vehicle production is now showing a stark contraction.

The following charts (click for larger) show the overall consumer durable component along with the Home Appliances, Furniture and Carpeting sub-component on both a time series and year-over-year basis, construction supply production with the wood products sub-component, and general and business related vehicle production all overlaid with the last two recessions for comparisons purposes.




As you can see, each measure appears to indicate that recession is either currently upon us or drawing ever nearer as the unwinding of the housing-led business cycle exacts its toll on the general economy.