Updated: 15-May-08 09:52 ET

April Industrial Production

Updated: 15-May-08 09:52 ET

Highlights

• Briefing.com Forecast: A decline in April is indicated by the 0.3 drop in manufacturing hours worked in the April payroll data.  This drop will probably prove temporary.  The backlog of manufacturing orders is at record levels, and overall economic demand is picking up modestly while export demand remains very strong.  Industrial production is holding up remarkably well for a period of weak economic growth and not too much should be read into the likely April decline.

Key Factors

• To be updated following the release.

Big Picture

• Surprising resilience in manufacturing is a major reason the period of weak economic growth late last year and early this year did not turn into a recession.  Industrial production in March was 1.6% above the year-ago level.  In recessions, production tends to drop sharply to well below year-ago levels.  For example, just prior to the 2001 recession and through 20021 and into early 2002, industrial production fell every single month.  Fourteen straight monthly declines were posted, with an average decline of 0.5% per month.  Year-over-year production fell to -5%.  This cycle, there have been monthly declines and a leveling off in production, but that reflects considerable resilience relative to the 2001 recession.