The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization. Although the revisions affect these data for January 1972 through February 2011, the most significant effects are for the period from 2008 through 2010. Measured from fourth quarter to fourth quarter, total IP is now reported to have declined 1.4 percentage points and 1.7 percentage points more sharply in 2008 and in 2009, respectively, and to have risen 0.5 percentage point more rapidly in 2010. That said, the broad contour of total IP in recent years is similar to previous estimates, and the dates of the recent peak (September 2007) and the recent trough (June 2009) are unchanged from the earlier estimates. However, the peak-to-trough decline in total IP, at 17.1 percent, is 2.0 percentage points larger than previously estimated. As of February 2011, total IP is now shown to have reversed about 55 percent of its peak-to-trough decline, somewhat less than previously reported.
The revised IP indexes incorporate detailed data from the U.S. Census Bureau’s 2009 Annual Survey of Manufactures (ASM), which showed a lower level of annual output than had been previously estimated. In addition to the 2009 ASM, data from selected editions of the Census Bureau’s 2009 Current Industrial Reports and annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2009 were used in the revised estimates. The monthly estimates of production were updated to incorporate late-arriving or revised monthly indicator data (either product data or input data), and they also reflect recalculations of seasonal factors.
Econintersect’s analysis for February 2011 is unaltered with this change, and in summary:
Despite the downward trend in the rate of change, IP appears to be in a strong growth cycle with no indication of any slowdown. The downward trend in the rate of change is an artifact of the strong surge in industrial production in the early months of 2010.
What did change are all the graphics in the analysis article. To understand the change, here are before and after graphics.