The US Industrial economy eased slightly last week (if pipeline scheduling is correct), while brisk consumer spending continued to ease off of its late-2009 strength.After two consecutive all-time highs and 5 consecutive weekly gains, the Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) eased ever so slightly, to 111.9 from the prior weeks 112.1. In its dailies (as per the "Part 7" industrial daily posts on the IV-CWEI site) the week started off strong before moderating a bit late week.
The paperboard-based Consumption Index had a sharper decline in the week (third soft week in a row), as the US public had to deal with a quick contraction in their ultimate money supply measure.. the stock market. In its dailies, the consumption index seemed to mirror equities in their corrections.
The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued its seemingly never-ending drop, remaining well-below pre-recessionary levels.
The aroma of political change (In the mind of the US voter) seemed to be drifting in the air last week, coming from the direction of Massachusetts (If the Republicans can take Senator Kennedy's old seat, every Democratic seat is vulnerable). From the perspective of both equities and the gas-flows, it seemed a slight depressant... perhaps momentarily igniting some consumers fears of a turn away from re-stimulating the US economy towards renewed political gridlock.
(We can all hope that that aroma of political change leads to more constructive endeavors... such as combining the best ideas of both parties to solve problems... rather than combining the worst ideas of both parties to recreate WrestleMania!)
Key to the US economy in the short term is of course the consumer... if consumer spending stalls, the productive side of the economy likely will follow into decline (Consumer-spending has been the leash that leads the dog of industrial production); if consumer spending continues strong, likely so will industrial production.
Of concern in the intermediate term will be the possibility of modest inflationary pressures as industrial production pushes further above the old 2007 highs (in terms of the Production Index) and the strongest sectors of the US industrial economy push towards 100% capacity utilization.
-Robry825
