After a string of 3 dismal economic weeks (judging from the gas flows) we had a sharp turn around in the Consumption Index last week, as the index (in the context of its 28-day moving average) rebounded from last weeks low. On a daily basis, paperboard-gas-flow scheduling (on which the index is based) jumped sharply, suggesting the 3-week lull (following the end of Easter/Spring Break) might have ended (we shall hope).
The production Index, however, bucked the trend and fell to its seventh recession low in as many weeks (though it too showed some pickup in its dailies) as industrial natgas flow scheduling (though higher from the previous two weeks) could not eclipse the stronger (Easter/Spring Break) flows that rolled off of its 28-day moving average.
Within the production index last week (on a daily basis) many industry groups (with noteworthy exceptions of refining, automotive and steel) had improvements in their dailies. Overall, I took it to be a fairly good week economically (if the data is correct), though everything-automotive is still in trouble.
The new Inventory Index again suggested (if both the Production and Consumption Indexes are right) that industry has been using the recent spurt in consumption to clear out inventory-clogged supply channels, as opposed to increasing production. I remain, however, leery that a rising dollar combined with lowered shipping costs might also provide an alternate explanation to the recent weakness in industrial & steel gas-flows. Waves of steel-imports have decimated the US steel industry in past periods of recessions and oil-price weakness. The same could be happening today.
Overall, I continue to see the recovery as intact, though fragile. It may be that industrial production may have to remain soft (with little in the way of rehiring) until excess inventories are worked off. If consumption can hold, perhaps the fragility of the economy will end once inventories are down to acceptable levels, and rehiring produces stimulus of its own.
Recessions are emotional animals. This one remains in the hands of the consumer... and his/her wallet