February Production Hits Record Level, Up 4.1%
According to the Federal Reserve, the durable goods industrial production index was 102.3 in February 2013. This represents a 4.1% increase over the production level of February 2012. Also, just like the record set last month, this is the highest level ever for the durable goods production index in the month of February. This is important to note because industrial production is highly seasonal.
While February production hit a record level, the rate of growth in durable goods production continues to slow. The 4.1% month-over-month rate of growth was the slowest since September 2010, which was only the second month of growth after the financial collapse. The slower month-over-month rate of growth is leading to a slower annual rate growth. The annual growth rate is now down to 6.7% from a recent peak of 8.1%.
One of the best leading indicators for durable goods production is capital goods new orders. The rate of change in new orders has fallen precipitously and has actually contracted the last three months. This trend in capital goods new orders is pointing towards to further slowing in the rate of growth in durable goods production.
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