<\/span><\/p>\n This is beyond ridiculous: industrial production and capacity utilization saw another massive downward revision, and Jul’s print still came in negative M\/M – manufacturing is in recession:<\/p>\n Note: Dr. Antoni has used industrial production, capacity utilization in the above graph, rather than manufacturing.<\/p>\n This struck me as an odd characterization, so I plotted the data over the same period (using manufacturing instead of industrial classification).<\/p>\n Figure 1:<\/strong> Manufacturing production (blue, left scale), employment (tan, left scale), aggregate hours (green, left scale), and real valued added (red), all in logs, 2007M12=0, and capacity utilization in manufacturing, in % (black, right scale). NBER defined peak-to-trough recession dates shaded gray. Note: 2007M12 is NBER’s business cycle peak. Source: Federal Reserve, BLS, BEA via FRED, NBER.\u00a0<\/em><\/p>\n The figure highlights two points: (1) manufacturing production (Fed index) and value added differ, since the former is gross, the latter net; (2) employment and hours are problematic measures for indicators since productivity in manufacturing is higher than the overall economy.<\/p>\n While capacity utilization has declined, it is still higher than the level on the eve of the pandemic.<\/p>\n It’s hard to see what’s going on more recently, so I present the corresponding post-pandemic data in Figure 2:<\/p>\n\n
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