The latest industrial production report in the US is not as negative as it looks on the surface

Jay Soloff

Argonath Financial

The latest industrial production report in the US is not as negative as it looks on the surface. August industrial production dropped 0.1% from July, the first decline since January. At the same time, July production was revised down from a 0.4% gain to a 0.2% gain. The financial markets reacted negatively to the production news, but digging a little deeper, the numbers are much better than they appear at first glance. First off, the annual increase in industrial production is still a healthy 4.1%. Moreover, the August drop was driven by a 7.6% decrease in motor vehicle production (after jumping a whopping 9% in July). Take out the motor vehicle noise (which is likely just normalization), and factory output increased at a reasonable 0.1%. Once again, there's still no reason to believe a US economic slowdown is in the cards. (VIEW LINK)

Jay Soloff
Jay Soloff
Research Analyst
Argonath Financial

I'm an investments analyst for a US-based independent investment research firm. My focus is on economics, options, and all types of stocks, but especially tech, Internet, and renewable energy companies. I have experience as a options market...


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