There is a lot of economic news out this morning, so I’ll try and jam it all into this post.
MarketWatch reports that consumer prices fell 0.1% in March. The core rate rose 0.2%. The WSJ roundup of economists’ reactions to the numbers generally indicated not a lot of concern about either inflation or deflation.
The bigger news surrounds output and here there are some decidedly mixed signals.
First the bad news from MarketWatch:
As businesses struggle to work down their inventories of unsold goods, the output of the nation’s factories, mines and utilities fell 1.5% in March, retreating in spite of higher production of motor vehicles and a boost from utilities, the Federal Reserve reported Wednesday.“The huge declines in industrial production in the past two quarters reflect very aggressive cuts in inventories by businesses,” wrote Nariman Behravesh, chief economist for IHS Global Insight. “We expect industrial production to contract 10.2% this year — the biggest drop in the postwar period — before bottoming in early 2010.”
Industrial production is down 13.3% since the recession began in December 2007, the largest percentage decline since the end of World War II, when production of military equipment ground to a halt and production fell 35%.In the past year, industrial production has fallen 12.8%. Output fell at a 20% annualized rate during the first quarter, and it’s now at the same level as December 1998, the Fed’s latest data showed.Factory production dropped 1.7% in March. Factory output has fallen 15.7% during the recession, also the largest decline since 1945-1946.Underscoring the trend in manufacturing, factory output has dropped 15% in the past 12 months and has fallen for five consecutive quarters.
The Federal Reserve Bank of New York said its Empire State index improved markedly in April, to a reading of negative 14.7 from negative 38.2 in March. The reading under zero shows most manufacturers say business is still getting worse, but at a slower pace.