Under the Radar:Industrial Production/Capacity Utilization

by Laura Ehrenberg-Chesler on November 19, 2009

in Economic Indicators,Investment Strategies

In recent weeks there has been non-stop talk about the effects of a weak dollar.  Questions and discussion range from the short term effect on the economy to a worry about hyper-inflation down the road.

Today instead of focusing on the dollar, let’s look at two indicators that are less talked about, but may be good indicators of future growth: Capacity Utilization and Industrial Production.

Global production is rebounding, with growth particularly impressive in Asia.  In the U.S.  industrial production rose for the fourth straight month and looks to be sustainable.  And, while there is still a lot of unused capacity in the U.S. manufacturing sector, it too rose for the fourth straight month in a row.

These important economic indicators are on the rebound.  Near term that is a positive for the equity markets.  We will look for these numbers to be sustainable over the coming months in order to be positive on economic growth, here and abroad, longer term.

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