Weather Blamed For Industrial Production Miss

Tyler Durden's picture


Industrial production is the latest economic miss, expected to rise from a previously unchanged print, to 0.3%, instead posting another flat print. The reason: blame it on the weather. From the Fed: "Industrial production was unchanged in March for a second month but rose at an annual rate of 5.4 percent in the first quarter of 2012. Manufacturing output declined 0.2 percent in March but jumped 10.4 percent at an annual rate in the first quarter. The gain in manufacturing output in the first quarter was broadly based: Even excluding motor vehicles and parts, which jumped at an annual rate of nearly 40 percent, manufacturing output moved up at an annual rate of 8.3 percent and output for all but a few major industries increased 5 percent or more. In March, production at mines rose 0.2 percent and the output of utilities gained 1.5 percent. For the quarter, however, the output of utilities dropped at an annual rate of 13.8 percent, largely as a result of unseasonably warm temperatures over the past several months, while the output of mining fell 5.4 percent. At 96.6 percent of its 2007 average, total industrial production for March was 3.8 percent above its year-earlier level. The rate of capacity utilization for total industry edged down to 78.6 percent, a rate 2.1 percentage points above its level from a year earlier but 1.7 percentage points below its long-run (1972--2011) average." In other words, blaming both cold and hot weather is now a solid excuse for anything that does not go according to the best laid plans of central bankers. Got it.

As the chart below shows, another record hot April, and IP is about to go negative all over again.

And here is an upcoming convergence trade that one can take to the bank:

Chart: Bloomberg and Reuters

Your rating: None

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Tue, 04/17/2012 - 09:28 | 2351093 t_kAyk
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the weather is an agent of chaos, and must be dealt with accordingly. 

Tue, 04/17/2012 - 09:29 | 2351101 GetZeeGold
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The rain got in our was horrible!


Tue, 04/17/2012 - 09:30 | 2351110 SimpleandConfused
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So Agent Smart, round up Agent 99 and proceed to the Cone of Silence.  CHAOS must be destroyed!

Tue, 04/17/2012 - 09:29 | 2351095 SheepDog-One
SheepDog-One's picture

Of course, milder weather SHOULD by any measure mean 'production' was more favorable...but nevermind all that we're a fascist dictatorship we say what we want.

Tue, 04/17/2012 - 09:37 | 2351131 GeezerGeek
GeezerGeek's picture

Perhaps too many 'workers' went out to the golf course or tennis courts. If it had rained/snowed they would have gone to work and produced real stuff. Alternatively, they could have done things akin to those described in today's (17 Apr. 2012) comic strip. [Wally was my hero when I was employed.] Anyone who has followed the Tylers' writings about the Schrodinger economy should enjoy the comic.

Tue, 04/17/2012 - 09:29 | 2351098 AlaricBalth
AlaricBalth's picture

It may be to hot to pay taxes today.

Tue, 04/17/2012 - 09:40 | 2351141 Cognitive Dissonance
Cognitive Dissonance's picture

I'll remember that excuse when I'm summoned to the IRS inquisition. :)

Tue, 04/17/2012 - 09:29 | 2351099 Jason T
Jason T's picture

Meanwhile, gasoline demand is down 55 weeks in a row y/o/y according to mastercard...and that trend looks to continue.  

Tue, 04/17/2012 - 09:28 | 2351103 CPL
CPL's picture

Blame it on the rain...because the rain don't mind...and you've got to blame it on something.

- Some lipsyncers from the 80's.

Tue, 04/17/2012 - 09:38 | 2351136 superflyguy
Tue, 04/17/2012 - 12:59 | 2351947 Kali
Kali's picture

Don't need a weatherman to know which way the wind blows.  Apologies to Bob Dylan.

Tue, 04/17/2012 - 09:30 | 2351105 AgShaman
AgShaman's picture

Their name is "Rothschild" (House of Red Shield)....and they own the machines.

They will be controlling the not adjust your position

Tue, 04/17/2012 - 09:29 | 2351106 Dr. Engali
Dr. Engali's picture

Everybody must be out golfing in the nice weather with all the extra coin they have in their pockets in this booming economy.


That was sarcasm by the way for those of you who don't understand sarcasm.. You know who you are.

Tue, 04/17/2012 - 09:29 | 2351107 adr
adr's picture

Data, what's data? The market doesn't understand data, only headlines. Nice juicy government coded word headlines.

Tue, 04/17/2012 - 09:31 | 2351113 youngman
youngman's picture

It sounds like Obama needs to regulate the weather.....those weather speculators...send the SEC after them...or is it the CFTC....or maybe the weather channel guys....

Tue, 04/17/2012 - 09:37 | 2351129 GetZeeGold
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Actually I think that is the EPA's jurisdiction.


Tue, 04/17/2012 - 09:33 | 2351114 Sauk Leader
Sauk Leader's picture

We have just gone over the cliff in order backlogs. My company was busy as hell the first quarter, went on vacation and came back and it is ugly how slow it got. This is much like first quarter 2009 slow. I hear of lots of downsizing in other industries too.

Tue, 04/17/2012 - 09:34 | 2351127 Dr. Engali
Dr. Engali's picture

So it's all your fault....vacationing during the nice weather.....slacker

Tue, 04/17/2012 - 09:38 | 2351134 Sauk Leader
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I went to Scotland. It rained. A lot.

Tue, 04/17/2012 - 09:36 | 2351130 Everybodys All ...
Everybodys All American's picture

Simply amazing how little money can move the markets these days. Once again low volume up and heavy volume down.

Tue, 04/17/2012 - 09:46 | 2351161 SheepDog-One
SheepDog-One's picture the way I'm seeing it the plan is no QE, just raise stock markets on command and try to chase evil oil speculators around to drop gas prices, which apprently costs $55 million in taxpayer money. 

Tue, 04/17/2012 - 09:39 | 2351132 yogibear
yogibear's picture

LOL, the weather has been warmer so you would think people would be out more shopping, consuming.

Plenty of vacant store fronts. Some huge malls with their anchor store fronts are vacant. 

Even newer ones are 80% vacant and have been 80% vacant for 3 years. The owners still have to pay real estate taxes that have been climbing in the last 3 years.

Those municipalities need more money to fund their rising pension costs and declining revenues.

Add Best Buy to that now. Closing thier stores and adding to the commercial real estate glut.



Tue, 04/17/2012 - 09:41 | 2351146 superflyguy
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Maybe they were out more, planting shit in their garden since they can't afford it in the supermarket anymore

Tue, 04/17/2012 - 09:43 | 2351153 Vincent Vega
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The more TPTB speak, the more they convince me that they have no clue what to do and that we are in the abyss. We just haven't hit bottom yet. It's going to be ugly when we do.

Tue, 04/17/2012 - 09:50 | 2351167 SheepDog-One
SheepDog-One's picture

Exactly, I think theyre just marching in place and have no idea what to do now. People always telling me about this 'grand masterplan of total world domination' or whatever....WTF this is just a clusterfuk, I really think it all looked good to them on paper and now that theyre here at the end of their plan when they have to 'do something', its not how they planned and they really have no idea what to do now. 

Tue, 04/17/2012 - 09:56 | 2351202 Winston Churchill
Winston Churchill's picture


No battle plan survives first contact.

TPTB have no idea what do next,and are scrabbling around

like cockroaches after the lights are turned on.

This is not going to be pretty, as their desperation settles in.

Tue, 04/17/2012 - 09:51 | 2351174 MFL8240
MFL8240's picture

Didnt we have weather when Ronald Regan was President, or is this a new phenomeon?

Tue, 04/17/2012 - 10:23 | 2351301 AgShaman
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Yes...but the tornadoes were seasonal.

Now they're showing up whenever the overlord is angry at his serfs

Tue, 04/17/2012 - 10:01 | 2351218 q99x2
q99x2's picture

If I get this right we've been expanding at a small rate for years. We must be getting close to re-production or is that rehypothecated reproduction. Can you put that into a CDO? Sounds to big to fit.

Tue, 04/17/2012 - 10:44 | 2351365 pods
pods's picture

Is McDonald's counted as industrial production?


Tue, 04/17/2012 - 11:06 | 2351451 MFL8240
MFL8240's picture

It has to be becuaes we have no other production except paper printing!

Tue, 04/17/2012 - 11:01 | 2351434 Spigot
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I'll tell ya, I can't wait for them to start blaming stuff on the coming space alien invasion...

Tue, 04/17/2012 - 11:27 | 2351567 Snakeeyes
Snakeeyes's picture

The weather, eh?

Treasury released their "We inherited such a mess from Bush that we were heros in getting the economy back on track!" See link.

US is last in the Cold War derby behind China and Russia. Ironic isn't it?

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