OK, I Get it, the US is a Service Economy, but this Looks Terrible

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OK, I Get it, the US is a Service Economy, but this Looks Terrible
by Wolf Richter • June 15, 2016


[font color="blue"]Recession Watch: huge brake shoe to drop on the economy.[/font]

The yield on the 10-year Treasury note fell to 1.57%, the lowest since November 2012, after the Fed got through flip-flopping today, to keep the notion of rate hikes alive without actually hiking rates. Fed officials worried about lousy job gains, terrible exports, puny investment, and Brexit, but they see inflation picking up, and they like that, though a serious bout of inflation is going to kneecap consumers, and so, the statement said, “growth in economic activity appears to have picked up.”

Just how much has that “growth in economic activity” picked up?

Yesterday, it was total business sales, which have been dropping since July 2014 and are now back where they’d been in April 2013. Today it’s industrial production.

The Fed’s Board of Governors reported that industrial production contracted 0.4% in May, after having expanded 0.6% in April. This is like Chinese water torture: drip by drip, with periods of calm in between that are just long enough to think that it’s over. Year-over-year, industrial production was down 1.4%.

Manufacturing, which accounts for about 80% of industrial production, output fell 0.4%, “led by a large step-down in the production of motor vehicles and parts,” which plunged 4.2%. ...............(more)

http://wolfstreet.com/2016/06/15/industrial-production-auto-sector-output-declines/