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January Industrial Production Decline Bodes Poorly For Q1 GDP Rebound

Tyler Durden's picture




 

It would appear that the channel-stuffed awesomeness of the auto manufacturing business has caught up with the inexorable reality of demand (even with uber cheap credit and subprime financing). January's Industrial Production missed positive (+0.2%) expectations and fell -0.1% for the first time in 3 months. What drove the slide? A 5.5% plunge - the largest in 6 months - in vehicle production (which dragged Manufacturing production -0.4% overall). This slide in Industrial Production does not offer much additional hope/hype for those looking to discard Q4's negative GDP print and expecting a Q1 jump.

 

 

Chart: Bloomberg

 

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Fri, 02/15/2013 - 10:31 | 3246192 Tsar Pointless
Tsar Pointless's picture

Bunga bunga?

Or have we moved on?

Opa!

Fri, 02/15/2013 - 10:40 | 3246215 TruthInSunshine
TruthInSunshine's picture

Malibus, Volts, Caterpillars & John Deere, too!

The inundation is a flooding in like a post-tsunami brew!

Stack that metal, high & deep!

At some point, we'll blow it all out cheap!

I'm off to JC Penney, so hold down the fort whist I'm gone!

(I'm really off to work my 2nd job hawking Herbalife crap to my siblings, friends & their spawn!)

Fri, 02/15/2013 - 10:41 | 3246231 FL_Conservative
FL_Conservative's picture

The annointed one will have his car czar on this immediately.  Ramp production back up and "loosen" credit approval standards.  I thought that's what student loans were for?

Fri, 02/15/2013 - 12:02 | 3246519 SeattleBruce
SeattleBruce's picture

You mean channel stuffing is not a long term solution for the mostly bailed out US auto industry?

Fri, 02/15/2013 - 10:33 | 3246197 Dr. Engali
Dr. Engali's picture

I'm surprised that the guns and ammo manufacturing didn't turn this number positive. Can you imagine what this number would be like if a bummer wasn't after selling guns?

Fri, 02/15/2013 - 10:34 | 3246199 edb5s
edb5s's picture

Big surprise; auto manufacturing lags after end-of-year channel stuffing extravaganza.  Who could have possibly seen this coming?

Fri, 02/15/2013 - 10:36 | 3246211 Dr. Engali
Dr. Engali's picture

That should read Obummer out there selling guns. Damn spellcheck.

Fri, 02/15/2013 - 10:35 | 3246205 thismarketisrigged
thismarketisrigged's picture

come on tyler, nothing in this market is negative. im sure that data is good for 50 plus dow pts, 5 plus s&p pts. if it had been a positive number, it would be more than enough to get us to 15000 dow next week and 1600 s&p,

 

this market has not only become a joke, its boring, its like it can never go red, and when it does, it does o so slightly

Fri, 02/15/2013 - 10:37 | 3246214 CheapBastard
CheapBastard's picture

Since every 3 minutes there's a commerical for some variety of 2-ton pickup truck, I suspected they are doing poorly.

Maybe changing their name to 'iTruck" would help their sales ?

Fri, 02/15/2013 - 10:43 | 3246239 Winston of Oceania
Winston of Oceania's picture

Still have a year of payments on my truck and they are bugging the shit out of me to trade it in. I keep declining as I too wear the badge of frugality, in fact my wife claims that only dogs can hear me fart.

Fri, 02/15/2013 - 11:54 | 3246495 piceridu
piceridu's picture

How about the deal GM signed with Man United...559M.  Amazing what Government Motors can do with bailout funds: 

http://www.businessweek.com/news/2012-08-03/manchester-united-says-gm-de...

 

Fri, 02/15/2013 - 12:04 | 3246531 SeattleBruce
SeattleBruce's picture

"Maybe changing their name to 'iTruck" would help their sales ?"

Can you play video games with it?!

Fri, 02/15/2013 - 10:38 | 3246218 LongSoupLine
LongSoupLine's picture

Fuck you GM.  Die you fucking fiat stuffed obama juice sucking union pricks.  Fuck off assholes.

Fri, 02/15/2013 - 10:39 | 3246222 Tsar Pointless
Tsar Pointless's picture

+3 F-bombs.

Not bad for one semi-long sentence and two short ones.

Fri, 02/15/2013 - 10:40 | 3246228 Everybodys All ...
Everybodys All American's picture

The markets feel like the are coming to a standstill with absolutely no one trading any longer.

Fri, 02/15/2013 - 10:46 | 3246250 Tsar Pointless
Tsar Pointless's picture

Well, yeah - that's the general intention.

Fri, 02/15/2013 - 10:44 | 3246243 firstdivision
firstdivision's picture

No worries, Ben has it covered.

Fri, 02/15/2013 - 10:45 | 3246248 SheepDog-One
SheepDog-One's picture

Why not just GIVE all the cars away, and claim them as sales? Who really gives a shit?

Fri, 02/15/2013 - 10:50 | 3246270 Bon Hagar
Bon Hagar's picture

Guy I know leases a Chevy Volt ($40,000+ sticker) for less than $200 @ month (GM employee) so, it's getting to that.

Fri, 02/15/2013 - 11:32 | 3246418 TruthInSunshine
TruthInSunshine's picture

I have proposed a federally-funded "Corvette/Escalade/Volt in every garage/parking lot/subsidized housing carport program," similar to FDR's "chicken in every pot."

Fri, 02/15/2013 - 10:47 | 3246256 kito
kito's picture

tyler, it was the meteor explosion this morning that affected industrial production.........shame on you for not realizing..............................

Fri, 02/15/2013 - 10:48 | 3246257 Bon Hagar
Bon Hagar's picture

Russia gets real meteors, we get fake ones.

Fri, 02/15/2013 - 10:49 | 3246260 Pasadena Phil
Pasadena Phil's picture

The capacity utilization index was up 10.3 points this morning which is counter-intuitive to this steep drop in manufacturing. Does anyone have numbers for whether manufacturing capacity is rising or falling? Given the diversion of cash away from CAPEX and into M&A, there is no reason why capacity should be rising.

Investing in a centrally planned global economy is so creepy. It's like piloting a 787 but none of the instrument readings make sense. Up is down, left is right, always flying through turbulence but the altimeter hovers at a constant 30,000 feet...

Fri, 02/15/2013 - 10:52 | 3246274 edb5s
edb5s's picture

+1, great analogy

Fri, 02/15/2013 - 11:09 | 3246316 Pasadena Phil
Pasadena Phil's picture

It's like the price of gold plummeting just as a global currency war goes nuclear and when central banks are the biggest buyers of gold. Is there no supply/demand pricing mechanism in the gold market? It's not like gold production is growning either.

And who is buying into this rally anyway? The volume continues to decline even though it has been abysmal for years!

Fri, 02/15/2013 - 13:13 | 3246809 Pasadena Phil
Pasadena Phil's picture

Maybe I'm misreading this but according to the latest Fed report on production and capacity utilization, ALL of the growth in production in December as well as improvement in capacity utilization was for utilities.

 

http://www.federalreserve.gov/releases/g17/Current/g17.pdf

 

Kind of makes the argument that the economy depends on iPhone users to consume electricty and ramp up usage charges to their service providers. Otherwise, it makes no sense to argue that our economy is improving.

Fri, 02/15/2013 - 11:07 | 3246323 Father Lucifer
Father Lucifer's picture

baffled

Fri, 02/15/2013 - 13:10 | 3246799 scottch
scottch's picture

Warren must like the ROI on that ad deal.  Saw where he's buying more GM.  I smell another round of GM bailout.

Fri, 02/15/2013 - 13:25 | 3246872 nightshiftsucks
nightshiftsucks's picture

I work in high tech mfg,our main market is automotive.Back in Sept they cut our shifts from 12 to 10 hours and in Dec we had layoffs.I guess orders are picking up a little bit because we are now back on 12 hour shifts for the next 4 months.It looks like the channel stuffing is going to go on a bit longer.

Fri, 03/08/2013 - 01:21 | 3311246 Cristy
Cristy's picture

Industrial production continued to decline, and unemployment became a major problem. I got a opportunity of work with Jib Cranes

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