INDICATOR: January Industrial Production and Import/Export Prices
KEY DATA: IP: -0.3%; Manufacturing: -0.8%/Imports: +0.1%; Nonfuel: +0.3%; Exports: +0.2%; Farm: -0.5%
IN A NUTSHELL: "The current economic slowdown, that hopefully can be blamed on the weather, is widespread."
WHAT IT MEANS: January can be a cruel month and this year it is especially so. Job gains were mediocre, unemployment claims are above where we would like to see them, retail sales were pathetic and not surprisingly, manufacturers reacted by cutting back production sharply. Industrial production was off moderately in January but only because utilities had to produce massive amounts to heat our homes, offices and plants. Manufacturing output tanked as fifteen of the nineteen industry groups posted declines. I guess you can say that is broad based. With dealerships snowed under and sales moderating, there was very little reason to assemble lots of vehicles and the makers didn't. Auto and light truck assemblies dropped over nine percent. The only bright spots were computers and machinery. Firms that are investing don't worry about a couple of months of bad weather.
On the inflation front, while there is currently not a lot, that could change a little. Import prices jumped in January as food costs are beginning to accelerate. A wide variety of consumer goods prices were up as well. Vehicle costs, though, continue to be well contained. Firms looking to invest are finding that capital goods prices did rise but they are still down over the year. As for exports, farm prices are dropping like snow - constantly. They are off nearly six percent from January 2013 levels.