Heading into the new year, one question we get a lot is: How is the economy doing?
Now, it can be hard to answer a question like that, because what one means by “the economy” can be different for different people. Are we talking about economic growth? Inflation? Employment? There’s no shortage of data out there. But one area that I’d like to point out for this week’s chart is industrial production.
What is industrial production? It’s simply a proxy for the level of manufacturing in the economy. It’s not the whole economy, but it is one—important—segment. As the chart above shows, this metric grew 2.5% year-over-year last month, the largest acceleration in three years. This is above the historical average, which is encouraging to see.
Typically, industrial production slows as the country approaches a recession. But with the indicator on the rise and broadening beyond AI capital spending, we see this as a positive for future economic growth.
This is intended for informational purposes only and should not be used as the primary basis for an investment decision. Consult an advisor for your personal situation.
Indices mentioned are unmanaged, do not incur fees, and cannot be invested into directly.
Past performance does not guarantee future results.