In yet another sign of a weakening economy, the latest industrial production report was an outright disaster. 
The Bloomberg Econoday consensus estimate was unchanged in May from June. Instead, Industrial production fell 0.5 percent and the Fed revised May from -0.2 percent to -0.5 percent.
Industrial Production Month-Over-Month Details
- Industrial Production: -0.54 Percent
- Manufacturing Durable Goods: -3.70 Percent
- Motor Vehicles and Parts: -3.02 Percent
- Manufacturing: -0.32 Percent
- Aircraft and Parts: +2.27 Percent
Aircraft was the only positive sector in the above group.
Industrial Production Index
Industrial Production Index Since 1972
It seems we have reached a permanently high plateau nirvana.
Recession Lead Times From IP Peaks
Peaks in industrial production tend to indicate economic peaks as well. The Recessions in 2001 and especially 2020 were exceptions.
IP peaked eight months ago, a long time by historical standards.
It would be amusing if recession started the very month nearly everyone gave up on the idea.
Inflation-Adjusted Retail Sales Weak Four of the Last Five Months
Note that Inflation-Adjusted Retail Sales Weak Four of the Last Five Months and real (inflation-adjusted) sales year-over-year were down seven in the last eight months.
EVs
Also note that Despite Huge Incentives, Supply of EVs on Dealer Lots Soars to 92 Days
Why build cars that nobody seems to want?
President Biden can mandate ridiculous rules, but he cannot force people to buy EVs.
The next two shoes to drop will be unemployment and the credit spread will widen.
The US is short on housing stock. Short on people to make houses. Short on people to work. Too many job openings. Immigration has been down and lots of jobs in demand. Many, many people retiring each year. Boomers and their parents passing on their wealth to their kids every year.
Unemployment will only come from labor mismatches (not enough trained tech people) for new systems and to work with robotics and other more advanced equipment.
EV’s cannot be produced in the U.S. at any respectable cost for what you are getting. The Unions and their Pensions rely on this. Not to mention the myriad of promises made by the Government to scores of very wealthy Business Owners across the World!
Without the high cost, and promises being done away with, there is no future in the U.S. for EV’s. The cost of battery replacement alone, makes it a non viable alternative for the next decade or more.
Only China and other Countries with extremely low cost labor can manufacture them, and they don’t want or need them in China. We can’t afford them here right now or in the foreseeable future, so where is the Market going to come from? Bad idea, at the wrong time, with no infrastructure to support it, is a Very Bad Plan if you want to call it a plan at all…
Tesla seems to be pretty good at it.
Obviously you’ve never shopped for an EV.
And the batteries easily last as long as a gas engine.
Wow. Clearly you don’t know anything about EVs.
The BEST Selling Vehicle in the ENTIRE WORLD is a Tesla EV.
China is selling more and more EVs every year, even though their Total Number of Vehicles sold dropped. (At the expense of ICE Vehicles.) More and more EV production in Europe and Growing.
The number of EVs sold in the US is up about 66% from last year. And growing. The % of overall ICE vehicles keeps falling. Legacy Automakers will have to either convert to EVs at a faster rate, with better pricing or die trying. China is exporting more and more EVs to Asia and Europe.
It’s going to crash the ICE vehicle markets by 2025 or 2026 at the latest.
My company presented Q2 results. Sales were down, but still profitable. ALL our major (global) customers had us manufacture less for them. Q3 and Q4 are expected to be at similar levels of sales as Q2.
It’s another muddle through decade. Maybe the hot weather will cause a recession.
There are always prophets of doom, warning about the next big recession/depression,
housing crash or stock market collapse. I’ve heard them all my life. They are right once every few decades or so, mostly by accident.
But most of the time, as you say, we just muddle through.
Yeah, I’m rich and retired from just shrugging and plugging in extra money every time I heard another gloomy prediction from Hussman/Mish/etc. I mean, they’ll be right sooner or later. But it doesn’t matter anymore to me thanks to just doing the boring long play every time.
EVs should be cheaper than a ICE car IMO, not more expensive. If the only reason to buy something is because government thinks it is green, I am not interested. I do not make purchasing decisions based on government opinions and the desire to be trendy or have a high social score.
ICE vehicles have been around for 100 years in volume and the world is doing just fine, thank you. Where I live the skies are blue and the air is clear. Thus, electric vehicles have to offer something more than unnecessary green stamp of herding approval. They do tend to perform better than ICE cars but I simply want a dependable, comfortable car that is economical AND CONVENIENT to run. Having to stop at a super charger, ever, makes electric cars inconvenient by definition.
Thus, the only way they can compete for my business is on price. And they suck at that. Badly. They should be cheaper because electric motors are significantly simpler than ICE drive trains. But that battery adds all the cost back in, and then some, only to need to be replaced in 7-10 years if all goes well.
You want to throw your money away on gas, and spend your afternoon waiting in line at Jiffy Lube, be my guest. My own EV is already 7 years old, come to think of it, and it still has 90% of it’s battery capacity. I fully expect it to finally go to it’s grave when one of my small children finally crashes it as a teenager in another decade, having in the meantime saved me many tens of thousands of dollars.
If superchargers were as common as gas stations would that change your opinion?
Trump put a 25% tariff on Chinese EV’s which if makes them uncompetitive in the US. Without the tariffs they may very well be less expensive than US made EV’s. China has now become the worlds largest auto exporter. Supposedly quality is on par with competitors. I am not an EV fan with no intention of buying one until its in my economic best interest but if the US wanted to accelerate EV adoption they would remove the tariffs.
There are people who buy EVs for environmental reasons. Some buy them because they like new tech. Those people bought EVs 5 years ago. Now people buy EVs because they make economic sense. They have much lower operational costs. And with a $7500 tax credit, many cost less than a typical gas car.
I charge at home and have never spent a second waiting for my cars to charge.
Did you know EVs actually get better range in city driving than highway driving? When you’re stuck in traffic with a gas car, you’re still eating a lot of gas. When an EV is stopped in traffic, it’s basically the same as being parked. I guess if the heat or AC is running, it uses a little more than being parked.
Makes an excellent case for hybrid.
They’re junk. They’re for people who are willing to pay extra for the appearance of helping the environment but use even more gas than if they just bought a gas car.
IYI
When a hybrid is stopped in traffic, it’s basically the same as being parked. In the winter residual heat keeps the car warm without draining the batteries. Plus there’s regenerative braking to recharge batteries on the run using the ICE energy.
Nonsense. EVs are not yet at scale for most manufacturers.
As that production grows rapidly, the cost curve comes down as well.
Driving around and having to stop at Gas Stations every week or two is simply ludicrous. Most EV owners NEVER have to go to a Gas Station. Charge at home, Overnight and don’t wast anytime during their week messing around with dirty, fume creating gas pumps.
Horse and Buggy was around for 100 years in volume…but that changed. ICE vehicles will go away even faster. We can already see that several countries are replacing their ICE with EVs at a highly accelerated rate. Doesn’t really matter what you do…or what you want…the rest of the people will be buying EVs, just like they are in all the other developed countries. The silliness of old farts talking about things from 100 years ago being the same today is laughable. We had wireline phones and in ten years, nearly everyone now has mobile. Then Mobile became Smartphones in 7 years. By the end of the decade manufacturers won’t be able to give ICE vehicles away.
The Dow is breaking out.
Does industrial production include military industrial production or is that a separate item somewhere?
Wondering just how much the war in Ukraine is propping things up since we are giving away billions in military hardware (equipment and ammo) that’s getting used up immediately. If it’s included, then things might be even worse if not for the war.
that right there is the idiocy of GDP and it’s derivative production numbers. if peace breaks out and department of war was shuttered, the GDP would plunge. but is that actually bad for most pocket books ?
Most of stuff shipped off to Ukraine is surplus – except Patriots and new ammo being produced.
Military goods production has surged to near all-time heights. From memory in the industrial production index it was +3% while the total Industrial Production was -0.54 percent.
It will take YEARS to replace all the Ammo, Vehicles, Equipment and Physical Resources that have been / are being sent to Ukraine. The depletion of the consumables alone will keep the Factories humming for years, much less the replacements and repair of so many vehicles, planes, trucks, tanks, Drones, etc.
This will pay off long term for both the US and EU.
link to ev-volumes.com
Look at the sales growth chart by year. EV sales are expected to grow over 36% in 2023.
People are buying EVs in the US. They’re just buying Tesla’s instead of Ford’s and Kia’s.
Your 92 days data excludes Tesla. Total trash. It’s like looking at tissue paper sales and excluding Kleenex.
EV’s are a fad like break dancing. It has no staying power. Good for some applications. Awful for others. The technology has not moved since the 70’s other than making cars lighter. Same with solar panels. Obama, Gates, Bezos, John Kerry and the rest of them are not putting that crap on their houses that’s for damn sure. Maybe finding a way to make mining for cobalt cheaper with kids in the Congo but until then no.
Henry Ford’s wife drove an EV. Nothing new here.
Which oil company do you work for?
Wow, you clearly know nothing about EVs or Solar.
Solar is the most rapidly increasing installed energy production in the US.
And YES…those people mentioned have it on their houses.
And EVs are growing faster and more popular every single year. Doubling in amount every other year basically.
Norway’s already at 90% New Plug In Vehicle Sales. Tesla Model Y has become the Best Selling Vehicle in the Entire World. Replacing the Toyota Corolla. China will be around 35% to 40% New EVs by the end of the year. Europe will be catching up the year following that. The US will Double the Number of EVs sold over the next Two Years, if not more.
EVs aren’t a Fad, anymore than Smartphones were a Fad. ICE vehicles are plummeting in overall marketshare in the Developed World and even in the Non-Developed World, Two and Three wheel EVs are growing massively.
People not understanding the rate of technology change better go back and look at what happened to Xerox, Kodak, Sears and Blockbuster and how quickly they went from ruling the roost…to shell of their former selves. It’s coming for ICE Vehicles rapidly and the end won’t be pretty for Legacy Auto and the Gasoline / Diesel Industry. EV and Battery Factories are being put up on every continent and will dominate the Developed World before the end of the Decade.
I am not concerned.
If the Kid wins the lottery he will buy up all the excess EV inventory.
Don’t forget, the experts have told us to dismiss the inverted yield curve and that “this time is different.” FOMO.