Friday, January 15, 2010

Steady Progress

The Lehmann Letter ©

A week ago this blog mentioned the Census Bureau’s wholesale sales and inventories report. It indicated that manufacturing had turned an important corner.

Two announcements today confirm that observation.

The Census Bureau released data showing that sales and inventories for manufacturing and trade both grew in November and that sales gained more than inventories: . Sales grew for for over six months following nine months of decline, and inventories gained for three months following a year of decline. This demonstrates that business is sufficiently confident of its sales gain to begin rebuilding stocks of goods. That’s a crucial turning point.

The Federal Reserve said that both industrial production and capacity utilization grew: . Industry is now operating at 72% of capacity. If you superimpose that figure on the chart below, you can see that industry is slowly climbing out of the ditch.

Capacity Utilization

(Click on chart to enlarge.)

Recessions shaded

There’s definitely progress to report.

(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.)

© 2010 Michael B. Lehmann

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