Today’s US industrial production and capacity utilization numbers showed a nice “steady as she goes” slow decline from previous months, though still positive at 3.90% YoY.
And it is difficult to argue that the US is in a recession when capacity utilization is at 80.27%.
Notice that industrial production growth falls below 0% during a recession and capacity utilization slumps. We are NOT there … yet.
However, M2 Money growth is shrinking awfully fast.
While the US is technically in default (two consecutive quarters of negative GDP growth), it doesn’t FEEL like a recession with 3.90% YoY industrial production growth and capacity utilization above 80%. During the Covid recession in early 2020, industrial production growth YoY had declined to -17.65% and capacity utilization shrank to 64.53%.
Speaking of a recession SIGNAL, the 10Y-2Y Treasury yield curve is SCREAMING impending recession.