US industrial production contracted in January 2023 - Economist

Data released on Thursday 12 Feb 2024 revealed negativity in US industrial production indicators during January 2024, as the reading was contrary to market expectations, as US industrial production recorded a contraction of 0.1%, while market expectations indicated industrial production growth of 0.2%.

This was after it had recorded a growth of 0.1% last December, and was then revised downwards with industrial production remaining at zero levels. It should be noted that this indicator measures the change in the value of inflation-adjusted production produced by factories, mines, and public facilities.

Therefore, this indicator is one of the leading indicators that express the health of the economy, as production is quickly affected by the business cycle and it is also linked to the consumer situation, employment levels, and wages.

The industrial production index is considered one of the important indicators for measuring the health of the economy, as production is quickly affected by fluctuations in the business cycle in addition to its connection to consumer conditions such as employment levels and profits.

In addition, industrial production measures the current output of the economy. It helps identify turning points in the business cycle, such as the beginning of a recession and the beginning of a recovery phase.

Also, industrial production and the capacity utilization rate not only represent the trend in the manufacturing sector, but the two indicators also show whether capacities are being utilized sufficiently to anticipate inflation rates or not?.