Industrial Production -- Rolling 12 Month Percent Change Strong

١٩ أغسطس ٢٠١٤

In the top pane is this month's latest Industrial Production Index, compared against the SPY, both on a Monthly timeframe. Plotted in the second pane is the rolling 12 month percent change in industrial production.

The IPI is an indicator prepared by the Federal Reserve Board using data from the Bureau of Labor and Statistics to measure the total output from several key industrial production industries: Manufacturing, Mining, Electricity, and Gas specifically.

The reason why I found this chart interesting is twofold. One, although I would not use it as a rote timing indicator, the tendency for the past several decades is that high industrial production is reflected by positive market returns on a long-term timeframe.

Two, and more topically, a popular meme in the financial media is that industrial production in America is weak, and this shows that not only is the absolute level of output making a new high, but the rate of change YoY is also accelerating over prior months.

The most recent YoY value of 6.077% is the highest reading since February 2011.