Monthly industrial production for January was released Friday by the Federal Reserve, and it was 2.3% above its January 2007 level (see graph below, click to enlarge). Industrial production is important because it is one of the recession-indicating variables watched by the National Bureau of Economic Research to determine the onset of a recession.
1. Calculated on an annual basis from the same month in the previous year, January 2008 marked the 55th consecutive month of positive growth in industrial production. The last time annual growth in industrial was negative was June of 2003, more than 4.5 years ago (see chart above).
2. January's 2.3% annual growth in industrial production was below the long-run trend of 2.9%, possibly indicating a mild slowdown in economic production, but certainly nowhere the negative growth rates in output associated with a recession, see the circled, shaded areas of recession on the graph above.
3. Since the summer of 2007, there has been a slight upward trend in the growth rate of output, further suggesting that the U.S. economy has not entered a recession.