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Click to enlarge.
The correlation is the same 0.985 it was on Friday. If you squint, you can see that August was a good month. It did come in slightly above trend, but not by all that much in the grand scheme of things.
Since all I really care about is the underlying long-term trend, let's eliminate much of this monthly noise by using 12-month moving averages instead.
Click to enlarge.
I have rarely seen a more perfect parabola in all of economics; and we are currently riding right on top of it.
Source Data:
St. Louis Fed: Industrial Production Index
3 comments:
No sarcasm in this post! Yay!
If you are as concerned about the future as I am, then you probably wish I had stuck with the sarcasm and offered a little less cold hard reality, lol. Sigh.
Gallows humor.
Thanks for the clarification. I am a short term trader whose biggest weakness is impatience.
I am guessing that your prediction of a recession by Oct '14 is the extension of these chart curves. I think those with enough power will manage to extend this time frame until after November 4th, the election. That is why I think Janet Yellen will be the next Fed chair. She will be compliant to Obama and her job will be to help her party in the mid-term elections.
Joseph Constable,
I understand where you are coming from now. Most of my charts concern the long-term, which probably doesn't help you all that much as a short-term trader. I should probably mention that more often.
I was not attempting to make a prediction for today's report, but I can understand why it might have seemed that way.
I would generally have waited to see today's data before posting the chart but it was actually in response to MaxedOutMama's post on Friday. Since I only cared about the long-term, one month didn't matter all that much to me. Still doesn't.
That said, I can totally understand why one month's data would matter to you though, as a short-term trader.
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