Monday, March 16, 2009

Industrial Destruction Continued

The Lehmann Letter ©

Today the Federal Reserve reported ( ) that capacity utilization had fallen to 70.9 percent in February. (Capacity utilization answers this question: What is the current rate of industrial production expressed as a percentage of the maximum? Industrial = Mining, manufacturing and public utilities.)

Connect that dot to the chart below and you can see we’re headed for the basement. We’ve also tied the all-time low of 70.9 percent to which this statistic fell in December 1982.

Capacity Utilization

(Click on chart to enlarge)

(Recessions shaded)

If capacity utilization continues to deteriorate, which seems likely, we will very soon have a new record low.

Too bad.

(The chart was taken from [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2009 Michael B. Lehmann

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