Most people probably missed the incredibly bad news on industrial production that the Fed released on Wednesday because the media gave it very little attention. The Fed reported that output in manufacturing fell 2.5 in January. It revised the December decline downward by 0.6 percentage points to 2.9 percent.
This puts that annual rate of decline over the last three months at an incredible 26.7 percent. The rate of capacity utilization in manufacturing is now 68.0 percent, far lower than at any point since 1987, when the current series began. This rate of utilization is almost certainly lower than the troughs of 1981-82 recession, and will certainly fall lower in the months ahead.
This is seriously bad news, but most people probably did not hear about it, perhaps because the media were reporting on people whining about the entitlement crisis.
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