America’s Industrial Downturn Won’t Throw the U.S. Into Recession, Probably
Americas Industrial Downturn Wont Throw the U.S. Into Recession, Probably
While industrial retrenching drags on economic growth, here's why it has yet to derail the expansion
By Eric Morath
Apr 27, 2016 9:36 am ET
A deep decline in Americas industrial output may not signal a recession is coming, for once. ... U.S. industrial production,
the Federal Reserves gauge of manufacturing, mining and utility output fell 1.8% in the first quarter, from a year earlier. ... Thats an ominous sign.
Industrial production has never plunged so deeply in a year that didnt include a recession, according to records dating back to 1919.
But this time should be different. While the industrial retrenching over the past year has been a drag on economic growth, its yet to derail the expansion. Economists surveyed by The Wall Street Journal project
the economy expanded at a 0.7% pace in the first quarter. Thats subpar growth, but not recession territory. ... The next reading on gross domestic product is due out Thursday.
What appears to be happening is the industrial sector is contracting, while the broader economy is inching forward.