Industrial Production Continues to Grow – 8.3% in February

 

Consumer durable goods industrial production in February was up 8.3% compared to February 2010. The one-month rate of change has increased each of the last three months, which means that production is growing faster each month. However, since June of last year the peak rate of industrial production has been close to the 87.0 level, with other months coming in lower.

 

In the chart below, you can see that the industrial production level seems to have stagnated. Starting in March, the comparisons will get tougher because in March 2010 there was a noticeable step up in consumer durable goods industrial production. Therefore, the 12-month rate of change will continue to show slower growth as it has for each of the last two months.

 

While consumer durable goods industrial production is slowing its rate of growth, capital goods industrial production is still growing faster and faster each month. It’s possible that we could see consumer durables continue to slow while capital goods continues to accelerate. Consumer durables are under pressure from the rising cost of food, energy and other necessities (you can thank Ben Bernanke for that). However, the surge in commodity prices and the tragic event in Japan should require a significant investment in capital goods.