Plenty of Room

May Industrial Production, according to the Federal Reserve, continued the decline we saw in April, falling 1.1%.  Broken up into its components, they reported mining output was off 2.1%, utilities saw their output decline 1.4%, and manufacturing fell -1.0%, primarily reflecting a continuing fall in motor vehicles and parts. Year over year, industrial production has now declined 13.4%.  A key part of the report showed Capacity Utilization fell .7% to 68.3%, a new record low dating back for forty years to the inception of this data series.  While manufacturing no longer has the same clout within our economy it enjoyed in the middle of the last century, it still accounts for considerable employment and this continued abatement does not suggest any sudden improvement in upcoming employment data. The figures for future retail sales may also have a difficult time overcoming their lethargy if rank and file workers feel a need to cut back their consumption.