Friday, May 14, 2010

Production Pullback: Industrial Production April 2010

Today, the Federal Reserve released their monthly read of industrial production showing continued growth with total industrial production increasing 0.8% from March and 5.18% since April 2009.

While this report appears to argue favorably for a continued recovery, it's important to note that massive government stimulus played an important role in generating this trend.

With the the stimulus now waning, it will be important to watch the trend in industrial production to see how sustained the growth truly is.

“Final product” consumer durable goods declined 0.05% on a month-to-month basis while jumping some 11.84% above the level seen just one year ago.

It’s important to note that the home appliances, furniture and carpeting component of durable consumption showed its first year-over-year increase in 53 consecutive months increasing 0.62% compared to April 2009.

Construction supply production now shows the first year-over-year increase seen in 43 consecutive months increasing 2.91% while wood products increased 2.44% over the same period.

The motor vehicle and business vehicle components are indicating that the government sponsored bounce and residual effects provided by the "cash for clunkers" policy appears to have now possibly peaked out.

Finally, HVAC (heating ventilation and air conditioning) increased notably in jumping 4.25% on a year-over-year basis.

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.





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