CMP Associates Regulation Blog

Output of manufacturing (SIC) in Nov 2025 at 45.5 percent below long-term trend since 1919 and at 31.6 percent below trend measured from 1999 to 2006. Output of manufacturing (NAICS) at 49.7 percent below trend measured from 1986 to 2006 and 32.2 percent below trend measured from 1999 to 2006. US Manufacturing Underperforming Below Trend in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide, Stagflation, Global Recession Risk, Worldwide Fiscal, Monetary and External Imbalances, World Cyclical Slow Growth, and Government Intervention in Globalization

I United Sates Industrial Production

I United States GDP

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

IIID Appendix on European Central Bank Large Scale Lender of Last Resort

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

IIID Appendix on European Central Bank Large Scale Lender of Last Resort

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

Note: This Blog will post only one indicator of the US economy while we concentrate efforts in completing a book-length manuscript in the critically important subject of INFLATION.

Preamble. United States total public debt outstanding is $38.4 trillion and debt held by the public $30.8 trillion (https://fiscaldata.treasury.gov/datasets/debt-to-the-penny/debt-to-the-penny) [Date last updated Jan 5, 2026.] The Federal Reserve Bank of Saint Louis estimates Federal Total Public Debt as percent of GDP at 118.8 in IIQ2025 and Federal Total Public Debt Held by the Public at 95.0 Percent of GDP (https://fred.stlouisfed.org/series/GFDEGDQ188S). [Shutdown affects data: https://news.research.stlouisfed.org/2025/09/a-u-s-government-shutdown-could-delay-some-fred-data-2/] The Net International Investment Position of the United States, or foreign debt, is $26.14 trillion at the end of IIQ2025 (https://www.bea.gov/sites/default/files/2025-09/intinv225.pdf) [Shutdown affects data]. The United States current account deficit is 3.3 percent of nominal GDP in IIQ2025, “down from 5.9 percent in the first quarter” (https://www.bea.gov/sites/default/files/2025-09/trans225.pdf) (Next release Jan 14, 2026) [Shutdown affects data]. The Treasury deficit of the United States reached $1.8 trillion in fiscal year 2024 (https://fiscal.treasury.gov/reports-statements/mts/). Total assets of Federal Reserve Banks reached $6.6 trillion on Jan 7, 2026 and securities held outright reached $6.3 trillion (https://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab1). US GDP nominal NSA reached $30.5 trillion in IIQ2025 (https://apps.bea.gov/iTable/index_nipa.cfm). US GDP contracted at the real seasonally adjusted annual rate (SAAR) of 1.0 percent in IQ2022 and grew at the SAAR of 0.6 percent in IIQ2022, growing at 2.9 percent in IIIQ2022, growing at 2.8 percent in IVQ2022, growing at 2.9 percent in IQ2023, growing at 2.5 percent in IIQ2023 growing at 4.7 percent in IIIQ2023, growing at 3.4 percent in IVQ2023, growing at 0.8 percent in IQ2024, growing at 3.6 percent in IIQ2024, growing at 3.3 percent in IIIQ2024, growing at 1.9 percent in IVQ2024, contracting at 0.6 percent in IQ2025, growing at 3.8 percent in IIQ2025 and growing at 4.3 percent in IIIQ2025 (https://apps.bea.gov/iTable/index_nipa.cfm). [Shutdown affects data] Total Treasury interest-bearing, marketable debt held by private investors increased from $3635 billion in 2007 to $16,439 billion in Sep 2021 (Fiscal Year 2021) or increase by 352.2 percent (https://fiscal.treasury.gov/reports-statements/treasury-bulletin/). John Hilsenrath, writing on “Economists Seek Recession Cues in the Yield Curve,” published in the Wall Street Journal on Apr 2, 2022, analyzes the inversion of the Treasury yield curve with the two-year yield at 2.430 on Apr 1, 2022, above the ten-year yield at 2.374. Hilsenrath argues that inversion appears to signal recession in market analysis but not in alternative Fed approach.

The Consumer Price index of the United States in Chart CPI-H increased 2.7 percent in Nov 2025 Relative to a Year Earlier, The Tenth Highest Since 8.9 percent in Dec 1981 was Followed by the Highest of 9.1 percent in Jun 2022, the Second Highest of 8.6 percent in May 2022, 8.5 percent in both Jul 2022 and Mar 2022, 8.3 percent in both Apr and Aug 2022, 8.2 percent in Sep 2022, 7.7 percent in Oct 2022, 7.1 percent in Nov 2022, 6.5 percent in Dec 2022, 6.4 percent in Jan 2023, 6.0 percent in Feb 2023, 5.0 percent in Mar 2023, 4.9 percent in Apr 2023, 4.0 percent in May 2023, 3.0 percent in Jun 2023, 3.2 percent in Jul 2023, 3.7 percent in Aug 2023, 3.7 percent in Sep 2023, 3.2 percent in Oct 2023, 3.1 percent in Nov 2023, 3.4 percent in Dec 2023, 3.1 percent in Jan 2024, 3.2 percent in Feb 2024, 3.5 percent in Mar 2024, 3.4 percent in Apr 2024, 3.3 percent in May 2024, 3.0 in Jun 2024, 2.9 percent in Jul 2024, 2.5 percent in Aug 2024, 2.4 percent in Sep 2024, 2.6 percent in Oct 2024, 2.7 percent in Nov 2024, 2.9 percent in Dec 2024, 3.0 percent in Jan 2025, 2.8 percent in Feb 2025, 2.4 percent in Mar 2025, 2.3 percent in Apr 2025, 2.4 percent in May 2025, 2.7 percent in Jun 2025, 2.7 percent in Jul 2025, 2.9 percent in Aug 2025, 3.0 percent in Sep 2025, no observations available (NA) for Oct 2025 during the shutdown, and 2.7 percent in Nov 2025.

Chart CPI-H, US, Consumer Price Index, 12-Month Percentage Change, NSA, 1981-2025

Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm

Table CPI-H, US, Consumer Price Index, 12-Month Percentage Change, NSA, 1981-1983, 2019-2025

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
1981	11.8	11.4	10.5	10.0	9.8	9.6	10.8	10.8	11.0	10.1	9.6	8.9
1982	8.4	7.6	6.8	6.5	6.7	7.1	6.4	5.9	5.0	5.1	4.6	3.8
1983	3.7	3.5	3.6	3.9	3.5	2.6	2.5	2.6	2.9	2.9	3.3	3.8
2019	1.6	1.5	1.9	2.0	1.8	1.6	1.8	1.7	1.7	1.8	2.1	2.3
2020	2.5	2.3	1.5	0.3	0.1	0.6	1.0	1.3	1.4	1.2	1.2	1.4
2021	1.4	1.7	2.6	4.2	5.0	5.4	5.4	5.3	5.4	6.2	6.8	7.0
2022	7.5	7.9	8.5	8.3	8.6	9.1	8.5	8.3	8.2	7.7	7.1	6.5
2023	6.4	6.0	5.0	4.9	4.0	3.0	3.2	3.7	3.7	3.2	3.1	3.4
2024	3.1	3.2	3.5	3.4	3.3	3.0	2.9	2.5	2.4	2.6	2.7	2.9
2025	3.0	2.8	2.4	2.3	2.4	2.7	2.7	2.9	3.0	NA	2.7

Chart VII-3 of the Energy Information Administration provides the US retail price of regular gasoline. The price moved to $2.796 per gallon on Jan 5, 2026, from $3.047 a year earlier or minus 8.2 percent.

Gasoline price graphs

https://www.eia.gov/petroleum/weekly/ [Chart discontinued See Weekly Petroleum Status Report.]

Chart VII-3A provides the US retail price of regular gasoline, dollars per gallon, from $1.191 on Aug 20,1990 to $2.796 on Jan 5, 2026 or 134.8 percent. The price of retail regular gasoline increased from $2.249/gallon on Jan 4,2021 to $2.796/gallon on Jan 5, 2026, or 24.3 percent. The price of retail regular gasoline decreased from $3.530/gallon on Feb 21, 2022, two days before the invasion of Ukraine, to $2.796/gallon on Jan 5, 2026 or minus 20.8 percent and had increased 57.0 percent from $2.249/gallon on Jan 4,2021 to $3.530/gallon on Feb 28, 2022.

Chart VII-3A, US Retail Price of Regular Gasoline, Dollars Per Gallon

Source: US Energy Information Administration

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPMR_PTE_NUS_DPG&f=W

Chart VII-4 of the Energy Information Administration provides the price of the Natural Gas Futures Contract increasing from $2.581 per million Btu on Jan 4, 2021 to $5.326 per million Btu on Dec 20, 2022 or 106.4 percent and closing at $1.785 on Apr 5, 2024 or change of minus 66.5 percent.

A graph of gas prices

AI-generated content may be incorrect.

Chart VII-4, US, Natural Gas Futures Contract 1

Source: US Energy Information Administration

https://www.eia.gov/dnav/ng/hist/rngc1d.htm

Chart VII-5 of the US Energy Administration provides US field production of oil moving from a high of 12.983 thousand barrels per day in Dec 2019 to 11.760 thousand barrels per day in Dec 2021 and the final point of 13.870 thousand barrels per day in Oct 2025.

Chart VII-5 United States Field Production of Crude Oil, Thousand Barrels Per Day

Sources: US Energy Information Administration https://www.eia.gov/dnav/pet/hist/leafhandler.ashx?n=pet&s=mcrfpus2&f=m

Chart VII-6 of the US Energy Information Administration provides net imports of crude oil and petroleum products. Net imports changed from 1967 thousand barrels per day in the first week of Dec 2020 to minus -3216 thousand barrels in the fourth week of Oct 25, 2024, minus 3310 thousand barrels in the second week of Dec 13, 2024 and minus 3.292 thousand barrels in the first week of Jan 2, 2026.

Chart VII-6, US, Net Imports of Crude Oil and Petroleum Products, Thousand Barrels Per Day

Source: US Energy Information Administration

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WTTNTUS2&f=W

Chart VI-7 of the EIA provides US Petroleum Consumption, Production, Imports, Exports and Net Imports 1950-2022. There was sharp increase in production in the final segment that reached consumption by 2020. There is reversal in 2021 with consumption exceeding production.

A graph of the number of companies

AI-generated content may be incorrect.

Chart VI-7, US Petroleum Consumption, Production, Imports, Exports and Net Imports 1950-2022, Million Barrels Per Day

https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php

Chart VI-8 provides the US average retail price of electricity at 12.78 cents per kilowatthour in Dec 2020 increasing to 17.98 cents per kilowatthour in Oct 2025 or 40.7 per cent.

Chart VI-8, US Average Retail Price of Electricity, Monthly, Cents per Kilowatthour

https://www.eia.gov/electricity/data/browser/#/topic/7?agg=0,1&geo=g&endsec=vg&linechart=ELEC.PRICE.US-RES.M~~~&columnchart=ELEC.PRICE.US-ALL.M~ELEC.PRICE.US-RES.M~ELEC.PRICE.US-COM.M~ELEC.PRICE.US-IND.M&map=ELEC.PRICE.US-ALL.M&freq=M&start=200101&end=202205&ctype=linechart&ltype=pin&rtype=s&pin=&rse=0&ma

United States manufacturing output from 1919 to 2025 monthly is in Chart I-4 of the Board of Governors of the Federal Reserve System. The second industrial revolution of Jensen (1993) is quite evident in the acceleration of the rate of growth of output given by the sharper slope in the 1980s and 1990s. Growth was robust after the shallow recession of 2001 but dropped sharply during the global recession after IVQ2007. Manufacturing output recovered sharply but has not reached earlier levels and is losing momentum at the margin. There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth of manufacturing at average 2.8 percent per year from Nov 1919 to Nov 2025. Growth at 2.8 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 108.5636 in Dec 2007 to 178.0579 in Nov 2025. The actual index NSA in Nov 2025 is 96.9756 which is 45.5 percent below trend. The underperformance of manufacturing in Mar-Nov 2020 originates partly in the earlier global recession augmented by the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Manufacturing output grew at average 1.5 percent between Dec 1999 and Dec 2006. Using trend growth of 1.5 percent per year, the index would increase to 141.7537 in Nov 2025. The output of manufacturing at 96.9756 in Nov 2025 is 31.6 percent below trend under this alternative calculation. Using the NAICS (North American Industry Classification System), manufacturing output fell from the high of 105.8434 in Jun 2007 to the low of 85.6368 in Apr 2009 or 19.1 percent. The NAICS manufacturing index increased from 85.6368 in Apr 2009 to 97.7127 in Nov 2025 or 14.1 percent. The NAICS manufacturing index increased at the annual equivalent rate of 3.4 percent from Dec 1986 to Dec 2006. Growth at 3.4 percent would increase the NAICS manufacturing output index from 106.6125 in Dec 2007 to 194.0744 in Nov 2025. The NAICS index at 97.7127 in Nov 2025 is 49.7 percent below trend. The NAICS manufacturing output index grew at 1.7 percent annual equivalent from Dec 1999 to Dec 2006. Growth at 1.7 percent would raise the NAICS manufacturing output index from 105.8434 in Dec 2007 to 144.2034 in Nov 2025. The NAICS index at 97.7127 in Nov 2025 is 32.2 percent below trend under this alternative calculation.

Chart I-4, US, Manufacturing Output, 1919-2025

Source: Board of Governors of the Federal Reserve System

https://www.federalreserve.gov/releases/g17/Current/default.htm

Chart I-4B provides the data for the period 2007-2025 SIC US Manufacturing. There has not been recovery from the higher levels before the recession from Dec 2007 to Aug 2009 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions).

Chart I-4B, US, Manufacturing Output, 2007-2025

htps://www.federalreserve.gov/releases/g17/Current/default.htm

Chart I-7 of the Board of Governors of the Federal Reserve System shows that output of durable manufacturing accelerated in the 1980s and 1990s with slower growth in the 2000s perhaps because processes matured. Growth was robust after the major drop during the global recession but appears to vacillate in the final segment. There is sharp contraction in Mar-Apr 2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). There is initial recovery in May 2020-Oct 2022 with deterioration/weakness and renewed oscillating growth in Nov 2022-Nov 2025.

Chart I-7, US, Output of Durable Manufacturing, 2007-2025

Source: Board of Governors of the Federal Reserve System

htps://www.federalreserve.gov/releases/g17/Current/default.htm

Chart I-7B provides NAICS Durable Manufacturing from 2007 to 2025. There has not been recovery from the higher levels before the recession from Dec 2007 to Aug 2009 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions).

Chart I-7B, US, Output of Durable Manufacturing, 2007-2025

Source: Board of Governors of the Federal Reserve System

htps://www.federalreserve.gov/releases/g17/Current/default.htm

Chart V-3D provides the index of US manufacturing (NAICS) from Jan 1972 to Nov 2025. The index continued increasing during the decline of manufacturing jobs after the early 1980s. There are likely effects of changes in the composition of manufacturing with also changes in productivity and trade. There is sharp decline in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).

Chart V-3D, United States Manufacturing (NAICS) NSA, Jan 1972 to Nov 2025

Source: Board of Governors of the Federal Reserve System

https://www.federalreserve.gov/releases/g17/Current/default.htmh

Chart V-3DB provides NAICS Manufacturing from 2007 to 2025. There has not been recovery from the higher levels before the recession from Dec 2007 to Nov 2009 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions).

Chart V-3DB, United States Manufacturing (NAICS) NSA, Jan 2007 to Nov 2025

Source: Board of Governors of the Federal Reserve System

https://www.federalreserve.gov/releases/g17/Current/default.htm

Chart VII-9 provides the fed funds rate and Three Months, Two-Year and Ten-Year Treasury Constant Maturity Yields. Unconventional monetary policy of near zero interest rates is typically followed by financial and economic stress with sharp increases in interest rates.

Chart VII-9, US Fed Funds Rate and Three-Month, Two-Year and Ten-Year Treasury Constant Maturity Yields, Jan 2, 1994 to 2022-2023

Source: Federal Reserve Board of the Federal Reserve System

https://www.federalreserve.gov/releases/h15/

Note: program does not download the entire right-side of the chart.

Chart VII-9A, US Fed Funds Rate and Three-Month, Two-Year and Ten-Year Treasury Constant Maturity Yields, Jan 2, 2022 to May 30, 2023

Source: Federal Reserve Board of the Federal Reserve System

https://www.federalreserve.gov/releases/h15/

Note: Chart is shortened of current dates in download.

Chart VI-14 provides the overnight fed funds rate, the yield of the 10-year Treasury constant maturity bond, the yield of the 30-year constant maturity bond and the conventional mortgage rate from Jan 1991 to Dec 1996. In Jan 1991, the fed funds rate was 6.91 percent, the 10-year Treasury yield 8.09 percent, the 30-year Treasury yield 8.27 percent and the conventional mortgage rate 9.64 percent. Before monetary policy tightening in Oct 1993, the rates and yields were 2.99 percent for the fed funds, 5.33 percent for the 10-year Treasury, 5.94 for the 30-year Treasury and 6.83 percent for the conventional mortgage rate. After tightening in Nov 1994, the rates and yields were 5.29 percent for the fed funds rate, 7.96 percent for the 10-year Treasury, 8.08 percent for the 30-year Treasury and 9.17 percent for the conventional mortgage rate.

Chart VI-14, US, Overnight Fed Funds Rate, 10-Year Treasury Constant Maturity, 30-Year Treasury Constant Maturity and Conventional Mortgage Rate, Monthly, Jan 1991 to Dec 1996

Source: Board of Governors of the Federal Reserve System

http://www.federalreserve.gov/releases/h15/update/

Chart VI-15 of the Bureau of Labor Statistics provides the all items consumer price index from Jan 1991 to Dec 1996. There does not appear acceleration of consumer prices requiring aggressive tightening.

Chart VI-15, US, Consumer Price Index All Items, Jan 1991 to Dec 1996

Source: Bureau of Labor Statistics

https://www.bls.gov/cpi/data.htm

Chart IV-16 of the Bureau of Labor Statistics provides 12-month percentage changes of the all items consumer price index from Jan 1991 to Dec 1996. Inflation collapsed during the recession from Jul 1990 (III) and Mar 1991 (I) and the end of the Kuwait War on Feb 25, 1991 that stabilized world oil markets. CPI inflation remained almost the same and there is no valid counterfactual that inflation would have been higher without monetary policy tightening because of the long lag in effect of monetary policy on inflation (see Culbertson 1960, 1961, Friedman 1961, Batini and Nelson 2002, Romer and Romer 2004). Policy tightening had adverse collateral effects in the form of emerging market crises in Mexico and Argentina and fixed income markets worldwide.

Chart VI-16, US, Consumer Price Index All Items, Twelve-Month Percentage Change, Jan 1991 to Dec 1996

Source: Bureau of Labor Statistics

https://www.bls.gov/cpi/data.htm

Chart USFX provides the exchange rate of US Dollars per EURO from 2007 to 2023. Barry Eichengreen and Jeffrey Sachs, Exchange Rates and Economic Recovery in the 1930s, The Journal of Economic History, Vol. 45, No. 4 (Dec 1985), argue that foreign exchange “depreciation was clearly beneficial for initiating countries” during the Great Depression of the 1930s and that it was no equivalent to “beggar my neighbor” policies such as tariffs.

Chart USFX, Exchange Rate USD/EURO 2007-2023

Source: https://www.federalreserve.gov/releases/h10/current/

Chart USFX, Exchange Rate USD/EURO 2000-2023

Source: https://www.federalreserve.gov/releases/h10/current/

Federal Reserve Bank of St. Louis https://fred.stlouisfed.org/

Chart USFX, Exchange Rate USD/EURO 2018-2023

Source: https://www.federalreserve.gov/releases/h10/current/

Federal Reserve Bank of St. Louis https://fred.stlouisfed.org/

Table USFX provides the rate of USD/EURO in selected months. The dollar appreciated sharply from USD 1.2254 on Jan 4, 2021 to 1.0787 on Aug 25, 2023 and 1.1738 on Jan 2, 2026.

Table USFX, USD/EURO Selected Months

Date	USD/EUR
1/4/2021	1.2254
1/5/2021	1.2295
1/6/2021	1.229
1/7/2021	1.2265
1/8/2021	1.2252
1/11/2021	1.2169
1/12/2021	1.2168
1/13/2021	1.2159
1/14/2021	1.2156
1/15/2021	1.2099
1/31/2023	1.0858
2/1/2023	1.0917
2/2/2023	1.0918
2/3/2023	1.0825
2/6/2023	1.0722
2/7/2023	1.0705
2/8/2023	1.0734
2/9/2023	1.0761
2/10/2023	1.0670
2/13/2023	1.0718
2/14/2023	1.0722
2/15/2023	1.0683
2/16/2023	1.0684
2/17/2023	1.0678
2/24/2023	1.0545
3/03/2023	1.0616
3/10/2023	1.0659
3/17/2023	1.0647
3/24/2023	1.0762
3/31/2023	1.0872
4/7/2023	1.0913
4/14/2023	1.0980
4/21/2023	1.0973
4/28/2023	1.1040
5/5/2023	1.1026
5/26/2023	1.0713
6/2/2023	1.0724
6/9/2023	1.0749
6/16/2023	1.0925
6/23/2023	1.0887
6/30/2023	1.0920
7/7/2023	1.0964
7/14/2023	1.1237
7/21/2023	1.1120
7/28/2023	1.1039
8/4/2023	1.1036
8/11/2023	1.0957
8/18/2023	1.0875
8/25/2023	1.0787
9/1/223	1.0787
9/8/2023	1.0709
9/15/2023	1.0673
9/22/2023	1.0660
9/29/2023	1.0584
10/6/2023	1.0596
10/13/2023	1.0502
10/20/2023	1.0592
10/27/2023	1.0592
11/3/2023	1.0733
11/10/2023	1.0710
11/17/2023	1.0879
11/24/2023	1.0934
12/1/2023	1.0878
12/8/2023	1.0746
12/15/2023	1.0906
6/21/2024	1.0694
2/7/2025	1.0329
1/2/2026	1.1738

Source: https://www.federalreserve.gov/releases/h10/current/

U.S. International Trade in Goods and Services September 2025

September 2025	-$52.8 B
August 2025	-$59.3 B

The U.S. goods and services trade deficit decreased in September 2025 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit decreased from $59.3 billion in August (revised) to $52.8 billion in September, as exports increased more than imports. The goods deficit decreased $7.1 billion in September to $79.0 billion. The services surplus decreased $0.6 billion in September to $26.2 billion.

Current release: December 11, 2025
Next release: January 8, 2026

Goods and Services Trade Deficit: Seasonally adjusted

.S. International Trade in Goods and Services September 2025

September 2025	-$52.8 B
August 2025	-$59.3 B

Current release: December 11, 2025
Next release: January 8, 2026

Source: https://www.bea.gov/data/intl-trade-investment/international-trade-goods-and-services [Data are not being updated during shutdown.]

A comprehensive analysis of the Mill-Bickerdike theorem and the Lerner theorem on tariffs and international terms of trade with application to the Brazilian coffee support program, the recovery of Brazil from the Great Depression and Brazil’s industrialization is in Carlos Manuel Pelaez, História da Industrialização Brasileira. Rio de Janeiro, APEC Editora, 1972.

Chart IID-1B provides the US terms of trade index, index of terms of trade of nonpetroleum goods and index of terms of trade of goods with the new base of 2017. The terms of trade of nonpetroleum goods dropped sharply from the mid-1980s to 1995, recovering significantly until 2014, dropping and then recovering again into 2021. There is relative stability in the terms of trade of nonpetroleum goods from 1967 to 2025 but sharp deterioration in the overall index and the index of goods.

A graph of a graph showing the growth of the stock market

AI-generated content may be incorrect.

Chart IID-1B, United States Terms of Trade Indexes 1967-2025, Quarterly

Source: Bureau of Economic Analysis

https://apps.bea.gov/iTable/index_nipa.cfm [Data are not being updated during shutdown.]

Percentage shares of net trade (exports less imports), exports and imports in US Gross Domestic Product are in Chart IA1-14 from 1979 to 2025. There is sharp trend of decline of exports and imports after the global recession beginning in IVQ2007. Net trade has been subtracting from growth since the stagflation of the 1970s.

Chart IA1-14, US, Percentage Shares of Net Trade, Exports and Imports in Gross Domestic Product, Quarterly, 1979-2025

Source: US Bureau of Economic Analysis

https://apps.bea.gov/iTable/index_nipa.cfm [Data are not being updated during shutdown.]

Table B provides the exchange rate of Brazil and the trade balance from 1927 to 1939. “Currency depreciation in the 1930s…benefitted the initiating countries…There can be no presumption that depreciation was beggar-thy-neighbor…competitive devaluation taken by a group of countries had they been even more widely adopted and coordinated internationally would have hasted recovery from the Great Depression,” Barry Eichengreen and Jeffrey Sachs, “Exchange Rates and Economic Recovery in the1930s,” Journal of Economic History, Vol. 45, No. 4 (Dec., 1985), pp.925-946.

Table B, Brazil, Exchange Rate and Trade Balance, 1927-1939

Year	Exchange Rate Mil-Réis per £	Trade Balance 1000 Contos
1927	40.6	370.9
1928	40.3	275.3
1929	40.6	332.7
1930	49.4	563.6
1931	62.4	1517.2
1932	48.1	1018.1
1933	52.6	655
1934	59.7	956.2
1935	57.9	248.1
1936	58.4	626.8
1937	56.9	-222.5
1938	57.6	-98.7
1939	71.1	631.9

Source: Carlos Manuel Peláez, Análise Econômica do Programa Brasileiro de Sustentação do Café 1906-1945: Teoria, Política e Medição, Revista Brasileira de Economia, Vol. 25, N 4, Out/Dez 1971, 5-213.

Christina D. Romer argues that growth of the money stock was critical in the recovery of the United States from the Great Depression (Christina D. Romer, What ended the Great Depression? The Journal of Economic History, Volume 52, Number 4, Dec 1992, pp 757-784).

Table C, Brazil, Yearly Percentage Changes of the Money Stock, M1 and M2, Exchange Rate, Terms of Trade, Industrial Production, Real Gross National Product and Real Gross Income Per Capita, 1930-1939

Period	M1	M2	Exchange Rate	Terms of Trade	Industrial Production	Real GNP	Real Gross Income Per Capita
1929/30	-9	-4	22	-34	-5	-1	-10
1930/31	4	1	26	-5	8	-3	-6
1931/32	15	7	-23	8	0	6	2
1932/33	10	4	10	-15	16	10	7
1933/34	5	6	13	5	13	7	5
1934/35	7	8	-3	-28	14	1	-4
1935/36	10	11	1	2	14	12	9
1936/37	10	9	-3	2	7	3	0
1937/38	19	13	1	-11	6	4	-1
1938/39	0	8	23	-12	14	4	2

Source: Carlos Manuel Peláez and Wilson Suzigan, História Monetária do Brasil. Segunda Edição Revisada e Ampliada. Coleção Temas Brasileiros, Universidade de Brasília, 1981.

“In the period of the free coffee market 1857-1906, international coffee prices fluctuated in cycles of increasing amplitude. British export prices decreased at a low average rate, and physical exports of coffee by Brazil increased at the average rate of 2.9 percent per year. The income terms of trade of the coffee economy of Brazil improved at the average compound rate of 4.0 percent per year. But the actual rate must have been much higher because of drastic improvements in the quality of manufactures while the quality of coffee remained relatively constant,” Carlos Manuel Peláez, “The Theory and Reality of Imperialism in the Coffee Economy of Nineteenth-Century Brazil,” The Economic History Review, Second Series, Volume XXIX, No. 2, May 1976. 276-290. See Carlos Manuel Peláez, “A Comparison of Long-Term Monetary Behavior and Institutions in Brazil, Europe and the United States,” The Journal of European Economic History, Volume 5, Number 2, Fall 1976, 439-450, Presented at the Sixth International Congress of Economic History, Section on Monetary Inflation in Historical Perspective, Copenhagen, 22 Aug 1974.

In his classic restatement of the Keynesian demand function in terms of “liquidity preference as behavior toward risk,” James Tobin (http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1981/tobin-bio.html) identifies the risks of low interest rates in terms of portfolio allocation (Tobin 1958, 86):

“The assumption that investors expect on balance no change in the rate of interest has been adopted for the theoretical reasons explained in section 2.6 rather than for reasons of realism. Clearly investors do form expectations of changes in interest rates and differ from each other in their expectations. For the purposes of dynamic theory and of analysis of specific market situations, the theories of sections 2 and 3 are complementary rather than competitive. The formal apparatus of section 3 will serve just as well for a non-zero expected capital gain or loss as for a zero expected value of g. Stickiness of interest rate expectations would mean that the expected value of g is a function of the rate of interest r, going down when r goes down and rising when r goes up. In addition to the rotation of the opportunity locus due to a change in r itself, there would be a further rotation in the same direction due to the accompanying change in the expected capital gain or loss. At low interest rates expectation of capital loss may push the opportunity locus into the negative quadrant, so that the optimal position is clearly no consols, all cash. At the other extreme, expectation of capital gain at high interest rates would increase sharply the slope of the opportunity locus and the frequency of no cash, all consols positions, like that of Figure 3.3. The stickier the investor's expectations, the more sensitive his demand for cash will be to changes in the rate of interest (emphasis added).”

Tobin (1969) provides more elegant, complete analysis of portfolio allocation in a general equilibrium model. The major point is equally clear in a portfolio consisting of only cash balances and a perpetuity or consol. Let g be the capital gain, r the rate of interest on the consol and r^e the expected rate of interest. The rates are expressed as proportions. The price of the consol is the inverse of the interest rate, (1+r^e). Thus, g = [(r/r^e) – 1]. The critical analysis of Tobin is that at extremely low interest rates there is only expectation of interest rate increases, that is, dr^e>0, such that there is expectation of capital losses on the consol, dg<0. Investors move into positions combining only cash and no consols. Valuations of risk financial assets would collapse in reversal of long positions in carry trades with short exposures in a flight to cash. There is no exit from a central bank created liquidity trap without risks of financial crash and another global recession. The net worth of the economy depends on interest rates. In theory, “income is generally defined as the amount a consumer unit could consume (or believe that it could) while maintaining its wealth intact” (Friedman 1957, 10). Income, Y, is a flow that is obtained by applying a rate of return, r, to a stock of wealth, W, or Y = rW (Friedman 1957). According to a subsequent statement: “The basic idea is simply that individuals live for many years and that therefore the appropriate constraint for consumption is the long-run expected yield from wealth r*W. This yield was named permanent income: Y* = r*W” (Darby 1974, 229), where * denotes permanent. The simplified relation of income and wealth can be restated as:

W = Y/r (1)

Equation (1) shows that as r goes to zero, r→0, W grows without bound, W→∞. Unconventional monetary policy lowers interest rates to increase the present value of cash flows derived from projects of firms, creating the impression of long-term increase in net worth. An attempt to reverse unconventional monetary policy necessarily causes increases in interest rates, creating the opposite perception of declining net worth. As r→∞, W = Y/r →0. There is no exit from unconventional monetary policy without increasing interest rates with resulting pain of financial crisis and adverse effects on production, investment and employment.

Inflation and unemployment in the period 1966 to 1985 is analyzed by Cochrane (2011Jan, 23) by means of a Phillips circuit joining points of inflation and unemployment. Chart VI-1B for Brazil in Pelaez (1986, 94-5) was reprinted in The Economist in the issue of Jan 17-23, 1987 as updated by the author. Cochrane (2011Jan, 23) argues that the Phillips circuit shows the weakness in Phillips curve correlation. The explanation is by a shift in aggregate supply, rise in inflation expectations or loss of anchoring. The case of Brazil in Chart VI-1B cannot be explained without taking into account the increase in the fed funds rate that reached 22.36 percent on Jul 22, 1981 (http://www.federalreserve.gov/releases/h15/data.htm) in the Volcker Fed that precipitated the stress on a foreign debt bloated by financing balance of payments deficits with bank loans in the 1970s. The loans were used in projects, many of state-owned enterprises with low present value in long gestation. The combination of the insolvency of the country because of debt higher than its ability of repayment and the huge government deficit with declining revenue as the economy contracted caused adverse expectations on inflation and the economy. This interpretation is consistent with the case of the 24 emerging market economies analyzed by Reinhart and Rogoff (2010GTD, 4), concluding that “higher debt levels are associated with significantly higher levels of inflation in emerging markets. Median inflation more than doubles (from less than seven percent to 16 percent) as debt rises frm the low (0 to 30 percent) range to above 90 percent. Fiscal dominance is a plausible interpretation of this pattern.”

The reading of the Phillips circuits of the 1970s by Cochrane (2011Jan, 25) is doubtful about the output gap and inflation expectations:

“So, inflation is caused by ‘tightness’ and deflation by ‘slack’ in the economy. This is not just a cause and forecasting variable, it is the cause, because given ‘slack’ we apparently do not have to worry about inflation from other sources, notwithstanding the weak correlation of [Phillips circuits]. These statements [by the Fed] do mention ‘stable inflation expectations. How does the Fed know expectations are ‘stable’ and would not come unglued once people look at deficit numbers? As I read Fed statements, almost all confidence in ‘stable’ or ‘anchored’ expectations comes from the fact that we have experienced a long period of low inflation (adaptive expectations). All these analyses ignore the stagflation experience in the 1970s, in which inflation was high even with ‘slack’ markets and little ‘demand, and ‘expectations’ moved quickly. They ignore the experience of hyperinflations and currency collapses, which happen in economies well below potential.”

Yellen (2014Aug22) states that “Historically, slack has accounted for only a small portion of the fluctuations in inflation. Indeed, unusual aspects of the current recovery may have shifted the lead-lag relationship between a tightening labor market and rising inflation pressures in either direction.”

Chart VI-1B provides the tortuous Phillips Circuit of Brazil from 1963 to 1987. There were no reliable consumer price index and unemployment data in Brazil for that period. Chart VI-1B used the more reliable indicator of inflation, the wholesale price index, and idle capacity of manufacturing as a proxy of unemployment in large urban centers.

Diagram

Description automatically generated

Chart VI1-B, Brazil, Phillips Circuit, 1963-1987

Source: ©Carlos Manuel Pelaez, O Cruzado e o Austral: Análise das Reformas Monetárias do Brasil e da Argentina. São Paulo: Editora Atlas, 1986, pages 94-5. Reprinted in: Brazil. Tomorrow’s Italy, The Economist, 17-23 January 1987, page 25.

I Industrial Production

There is socio-economic stress in the combination of adverse events and cyclical performance:

Output of manufacturing (SIC) in Nov at 45.5 percent below long-term trend since 1919 and at 27.1 percent below trend measured from 1999 to 2006. Output of manufacturing (NAICS) at 49.7 percent below trend measured from 1986 to 2006 and 32.2 percent below trend measured from 1999 to 2006 (Section I and earlier https://cmpassocregulationblog.blogspot.com/2025/09/us-gdp-contracted-at-real-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2025/08/us-gdp-contracted-at-real-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2025/08/although-swings-in-net-exports-continue.html and earlier https://cmpassocregulationblog.blogspot.com/2025/07/manufacturing-increased-cumulatively-14.html and earlier https://cmpassocregulationblog.blogspot.com/2025/06/manufacturing-increased-cumulatively-16.html and earlier https://cmpassocregulationblog.blogspot.com/2025/05/although-swings-in-net-exports-have.html and earlier https://cmpassocregulationblog.blogspot.com/2025/04/the-consumer-price-index-of-united_11.html and earlier https://cmpassocregulationblog.blogspot.com/2025/03/manufacturing-increased-cumulatively-02.html and earlier https://cmpassocregulationblog.blogspot.com/2025/01/ and earlier https://cmpassocregulationblog.blogspot.com/2024/12/us-gdp-contracted-at-real-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2024/11/us-gdp-contracted-at-real-seasonally_29.html and earlier https://cmpassocregulationblog.blogspot.com/2024/11/us-gdp-contracted-at-real-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2024/09/manufacturing-increased-cumulatively-16.html and earlier https://cmpassocregulationblog.blogspot.com/2024/08/in-support-of-its-goals-committee.html and earlier https://cmpassocregulationblog.blogspot.com/2024/06/us-gdp-contracted-at-real-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2024/05/us-gdp-contracted-at-real-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2024/05/in-support-of-its-goals-committee.html and earlier https://cmpassocregulationblog.blogspot.com/2024/04/us-gdp-contracted-at-real-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2024/03/us-gdp-contracted-at-real-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2024/01/us-gdp-contracted-at-real-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2023/12/us-gdp-contracted-at-real-seasonally_29.html and earlier https://cmpassocregulationblog.blogspot.com/2023/12/us-gdp-contracted-at-real-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2023/11/the-federal-open-market-committee-fomc.html and earlier https://cmpassocregulationblog.blogspot.com/2023/09/us-gdp-grew-at-seasonally-adjusted_29.html and earlier https://cmpassocregulationblog.blogspot.com/2023/09/us-gdp-grew-at-seasonally-adjusted.html and earlier https://cmpassocregulationblog.blogspot.com/2023/07/us-gdp-grew-at-seasonally-adjusted.html and earlier https://cmpassocregulationblog.blogspot.com/2023/07/us-gdp-grew-at-seasonally-adjusted.html and earlier https://cmpassocregulationblog.blogspot.com/2023/05/us-gdp-grew-at-seasonally-adjusted.html and earlier https://cmpassocregulationblog.blogspot.com/2023/04/us-gdp-grew-at-seasonally-adjusted_29.html and earlier https://cmpassocregulationblog.blogspot.com/2023/04/us-gdp-grew-at-seasonally-adjusted.html and earlier https://cmpassocregulationblog.blogspot.com/2023/02/us-gdp-grew-at-seasonally-adjusted.html and earlier https://cmpassocregulationblog.blogspot.com/2023/01/us-gdp-grew-at-seasonally-adjusted.html and earlier https://cmpassocregulationblog.blogspot.com/2022/12/us-gdp-grew-at-seasonally-adjusted_31.html and earlier https://cmpassocregulationblog.blogspot.com/2022/12/us-gdp-grew-at-seasonally-adjusted.html and earlier https://cmpassocregulationblog.blogspot.com/2022/10/us-gdp-grew-at-seasonally-adjusted.html and earlier https://cmpassocregulationblog.blogspot.com/2022/10/us-gdp-contracted-at-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2022/09/us-gdp-contracted-at-seasonally.html and earlier https://cmpassocregulationblog.blogspot.com/2022/08/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2022/07/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2022/05/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2022/04/inflation-accelerating-worldwide.html and earlier https://cmpassocregulationblog.blogspot.com/2022/03/the-fomc-decided-to-raise-target-range.html and earlier https://cmpassocregulationblog.blogspot.com/2022/02/united-states-producer-prices-of.html and earlier https://cmpassocregulationblog.blogspot.com/2022/01/united-states-producer-prices-of.html and earlier https://cmpassocregulationblog.blogspot.com/2021/12/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/total-nonfarm-hires-move-from-4986.html and earlier https://cmpassocregulationblog.blogspot.com/2021/10/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/09/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/08/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/07/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/06/unchanged-fomc-target-fed-funds-rate.html and earlier https://cmpassocregulationblog.blogspot.com/2021/05/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/04/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/03/unchanged-fomc-target-fed-funds-rate.html and earlier https://cmpassocregulationblog.blogspot.com/2021/02/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/01/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2020/12/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2020/11/cumulative-growth-of-us-manufacturing.html and earlier (https://cmpassocregulationblog.blogspot.com/2020/10/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2020/09/federal-open-market-committee-leaves.html and earlier https://cmpassocregulationblog.blogspot.com/2020/08/us-industrial-production-increased-3.html and earlier https://cmpassocregulationblog.blogspot.com/2020/07/growth-of-industrial-production-of-54.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/recovery-in-jun-2020-of-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2020/05/recovery-without-hiring-twenty-million.html and earlier https://cmpassocregulationblog.blogspot.com/2020/04/contraction-of-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2020/03/sharp-contraction-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2020/02/declining-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2020/01/declining-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/12/diverging-economic-conditions-and.html and earlier https://cmpassocregulationblog.blogspot.com/2019/11/oscillating-risk-financial-assets-world.html and earlier https://cmpassocregulationblog.blogspot.com/2019/10/increasing-valuations-of-risk-financial_26.html and earlier https://cmpassocregulationblog.blogspot.com/2019/09/uncertain-fomc-outlook-of-monetary.html and earlier https://cmpassocregulationblog.blogspot.com/2019/08/global-decline-of-yields-of-government.html and earlier https://cmpassocregulationblog.blogspot.com/2019/07/global-manufacturing-stress-world.html and earlier https://cmpassocregulationblog.blogspot.com/2019/07/global-manufacturing-stress-world.html and earlier https://cmpassocregulationblog.blogspot.com/2019/06/fomc-outlook-uncertainty-central-bank.html and earlier https://cmpassocregulationblog.blogspot.com/2019/05/decreasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/04/increasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/03/inverted-yield-curve-of-treasury.html and earlier (https://cmpassocregulationblog.blogspot.com/2019/02/revaluation-of-yuanus-dollar-exchange.html and earlier https://cmpassocregulationblog.blogspot.com/2019/01/delays-in-updating-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/12/increase-of-interest-rates-by-monetary.html and earlier https://cmpassocregulationblog.blogspot.com/2018/11/weaker-world-economic-growth-with.html and earlier https://cmpassocregulationblog.blogspot.com/2018/10/oscillation-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2018/09/world-inflation-waves-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/08/world-inflation-waves-lost-economic.html and earlier https://cmpassocregulationblog.blogspot.com/2018/07/continuing-gradual-increases-in-fed.html and earlier (https://cmpassocregulationblog.blogspot.com/2018/06/world-inflation-waves-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/05/dollar-revaluation-united-states_24.html and earlier (https://cmpassocregulationblog.blogspot.com/2018/04/rising-yields-world-inflation-waves.html and earlier https://cmpassocregulationblog.blogspot.com/2018/03/united-states-inflation-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/02/world-inflation-waves-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/01/dollar-devaluation-and-increasing.html and earlier https://cmpassocregulationblog.blogspot.com/2017/12/mediocre-cyclical-united-states_23.html and earlier https://cmpassocregulationblog.blogspot.com/2017/11/the-lost-economic-cycle-of-global_25.html and earlier https://cmpassocregulationblog.blogspot.com/2017/10/world-inflation-waves-long-term-and.html and earlier) (https://cmpassocregulationblog.blogspot.com/2017/09/monetary-policy-of-reducing-central.html and earlier https://cmpassocregulationblog.blogspot.com/2017/08/fluctuating-valuations-of-risk.html and earlier (https://cmpassocregulationblog.blogspot.com/2017/07/rising-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2017/06/fomc-interest-rate-increase-planned.html and earlier https://cmpassocregulationblog.blogspot.com/2017/05/dollar-devaluation-world-inflation.html and earlier https://cmpassocregulationblog.blogspot.com/2017/04/united-states-commercial-banks-assets.html and earlier https://cmpassocregulationblog.blogspot.com/2017/03/fomc-increases-interest-rates-world.html and earlier https://cmpassocregulationblog.blogspot.com/2017/02/world-inflation-waves-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2017/01/world-inflation-waves-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2016/12/of-course-economic-outlook-is-highly.html and earlier http://cmpassocregulationblog.blogspot.com/2016/11/interest-rate-increase-could-well.html and earlier http://cmpassocregulationblog.blogspot.com/2016/10/dollar-revaluation-world-inflation.html and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-volatility-of-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2016/08/interest-rate-policy-uncertainty-and.html and earlier (http://cmpassocregulationblog.blogspot.com/2016/07/unresolved-us-balance-of-payments.html and earlier http://cmpassocregulationblog.blogspot.com/2016/06/fomc-projections-world-inflation-waves.html and earlier (http://cmpassocregulationblog.blogspot.com/2016/05/most-fomc-participants-judged-that-if.html and earlier (http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html and earlier (http://cmpassocregulationblog.blogspot.com/2016/03/monetary-policy-and-competitive.html and earlier http://cmpassocregulationblog.blogspot.com/2016/02/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2016/01/unconventional-monetary-policy-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-interest-rates-with-monetary.html and earlier http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-liftoff-followed-by.html http://cmpassocregulationblog.blogspot.com/2015/10/interest-rate-policy-quagmire-world.html and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-increase-on-hold-because.html and earlier http://cmpassocregulationblog.blogspot.com/2015/08/exchange-rate-and-financial-asset.html

“The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization. The most prominent features of the revision are an update of the base year to 2017 for the indexes, a conversion of the industry-group indexes to the 2017 North American Industry Classification System (NAICS), the incorporation of comprehensive annual production data for 2017 through 2019, and the incorporation of new survey utilization rate data for 2019 and 2020.[1]

On net, the revisions to total IP for recent years are negative. Notably, the updated rates of change are 1 to 1-1/2 percentage points lower per year from 2017 through 2019.[2] The cumulative effect of these revisions leaves the level of total IP in April 2021 about 3-1/2 percent below its late-2007 peak before the Great Recession; previously, total IP in April 2021 was slightly above its peak before the Great Recession. The incorporation of detailed data for manufacturing from the U.S. Census Bureau's 2017 Economic Census (EC) and the 2018 and 2019 Annual Surveys of Manufactures (ASMs) accounts for the majority of the differences between the current and the previously published estimates. The revisions to the rates of change for 2020 are small, and the magnitude of the sharp drop (17 percent) in total IP at the onset of the pandemic in early 2020 is very similar to the magnitude reported earlier.

Annual capacity growth is revised down about 1 percentage point, on average, from 2017 to 2019 and is little changed in 2020. After these revisions, capacity for total industry is estimated to have grown about 3 percent less between 2016 and the end of 2020 than previously estimated.

In the fourth quarter of 2020, capacity utilization for total industry stood at 73.4 percent, about 1/2 percentage point below its previous estimate and about 6-1/4 percentage points below its long-run (1972–2020) average. The utilization rate for 2019 is also about 1/2 percentage point lower than the previous estimate, but revisions to utilization rates for 2017 and 2018 are very small.”

The Board of Governors of the Federal Reserve System conducted its annual revision of industrial production and capacity utilization on Jun 28, 2022 (https://www.federalreserve.gov/releases/g17/Revisions/20220628/DefaultRev.htm):

“Manufacturing output is now estimated to have fallen about 2-1/2 percent in both 2019 and 2020 before moving up about 4-1/4 percent in 2021; these rates of change are identical to the estimates published previously. Manufacturing output is now estimated to have dropped about 18-1/2 percent between February 2020 and April 2020 because of the pandemic, only slightly less than was originally reported. Factory output has moved up robustly since then, and the index for May 2022 is currently reported to be 3-1/2 percent above its pre-pandemic level, about 1 percentage point less of a gain than the pre-revision estimate.

The revised contour for mining output shows a modest increase in 2019, a sharp drop in 2020, and a substantial rebound thereafter. The rates of change are broadly similar to those published previously, although the gains in 2019 and 2021 are now each about 1 percentage point stronger, and the decline in 2020 is about 1-1/2 percentage points steeper. The index for mining currently stands about 4 percent below its pre-pandemic level; before the revision, the index was 2 percent below its pre-pandemic level. The rates of change for utilities output are moderately higher in 2020 and little different in other recent years.”

The Board of Governors of the Federal Reserve System conducted its annual revision of industrial production and capacity utilization on Mar 28, 2023 (https://www.federalreserve.gov/releases/g17/Revisions/20230328/DefaultRev.htm): “Manufacturing output is now estimated to have been about 3 percent lower in the fourth quarter of 2020 than it was a year earlier; it moved up about 3-1/2 percent in 2021 and another 3/4 percent in 2022. The rates of change for 2020 and 2021 are respectively about 1/2 percentage point and 3/4 percentage point weaker than the estimates published previously, whereas the rate of change for 2022 is about 1/4 percentage point stronger. Manufacturing output is now estimated to have dropped more than 19 percent between February 2020 and April 2020 because of the pandemic, about the same as was previously reported. Factory output has recovered since then, and the index for February 2023 is currently reported to be about 3/4 percent above its pre-pandemic level, about 1/2 percentage point less of a gain than the pre-revision estimate.

The revised contour for mining output shows a sharp drop in the first half of 2020 and a substantial rebound later in 2020 and in 2021, followed by continued but more moderate growth in 2022. The rates of change are broadly similar to those published previously, although the gains in 2021 and 2022 are now each about 3/4 percentage point weaker, and the drop between the fourth quarters of 2019 and 2020 is about 1/3 percentage point smaller. The index for mining currently stands about 3-1/4 percent below its pre-pandemic level; before the revision, the index was 2-1/3 percent below its pre-pandemic level. The rates of change for utilities output are little changed from their previously reported values.”

The Board of Governors of the Federal Reserve System announced the annual revision of industrial production and capacity utilization on Jun 28, 2024 (https://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm): “The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization.[1] On net, growth rates for total IP were little changed in recent years, with most years unchanged; the rates of change for 2020 and 2023 were revised up by 0.1 percentage point and down by 0.1 percentage point, respectively.[2] Similarly, the utilization rates for total industry are little changed from previous estimates.

Because revisions to the index of IP were minimal, the overall picture of performance in the industrial sector since the COVID-19 pandemic is unchanged. After contracting sharply in the first half of 2020 because of the pandemic, the industrial sector rebounded later in the year and in 2021, and it exhibited more modest growth in 2022. Output growth slowed further in 2023, with production roughly flat since 2022.

In the fourth quarter of 2023, capacity utilization for total industry stood at 78.3 percent, 1/2 percentage point below its previous estimate and about 1-1/2 percentage points below its long-run (1972–2023) average. Most of the small downward revision to utilization reflects modest upward revisions to estimates of capacity. The utilization rates for 2018 to 2022 are close to previous estimates—within 0.3 percentage point—and revisions to earlier years are negligible.

Annual capacity growth for the industrial sector is revised up by 0.8 percentage point in 2023; earlier year revisions are very small. Capacity for total industry at the end of 2023 is now estimated to be 1-1/2 percent higher than at the end of 2018; previously, it was estimated to have increased about 1/2 percent over this period.

This revision incorporated newly available annual data on output for logging and mining industries as well as annual data on shipments for publishing industries. The nominal data used in the benchmark indexes for manufacturing industries—the Census Bureau's Census of Manufactures—are not yet available for 2022. Within mining, the indexes for metallic and nonmetallic minerals were updated with revised annual data for 2021 and with new data for 2022 from the U.S. Geological Survey (USGS). For publishing, the IP indexes folded in data for 2022 from the Census Bureau's Service Annual Survey. The index for logging was updated to include data from 2021 and 2022 from the U.S. Forest Service.

With no new benchmark data for manufacturing, the annual rates of change for IP are very similar to the estimates published previously. The monthly pattern of production, however, has been updated to include late-arriving or revised quarterly or monthly indicator data, including information from the Bureau of Labor Statistics' (BLS) benchmark revisions to the Current Employment Statistics. The IP estimates also reflect updated seasonal factors.

The revised estimates of capacity and capacity utilization incorporated data from the Census Bureau's Quarterly Survey of Plant Capacity Utilization for the fourth quarters of 2022 and 2023 along with new data on capacity from the USGS, the Energy Information Administration, and other organizations.”

The Board of Governors of the Federal Reserve System announced the annual revision of industrial production and capacity utilization on Nov 24, 2025 (https://www.federalreserve.gov/releases/g17/Revisions/20251124/DefaultRev.htm): “Industrial Production and Capacity Utilization: The 2025 Annual Revision. Release Date: November 24, 2025

The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization. The most prominent features of the revision are the incorporation of comprehensive annual production data from the U.S. Census Bureau's 2022 Economic Census (EC), a conversion of the industry-group indexes to the 2022 North American Industry Classification System (NAICS), a conversion of the product-group indexes used for benchmarking many of the series to the 2022 North American Product Classification System (NAPCS), and the integration of survey utilization rate data for 2024.[1]

On net, the revisions to total IP for recent years are negative. The cumulative effect of these revisions leaves the level of total IP in August 2025 roughly equal to its level from February 2020, whereas IP was previously estimated to have increased 2.2 percent over that period. The largest revision to annual rates of change is in 2022, where the rate of change is revised down by 1.7 percentage points, while the revisions before 2022 are roughly offsetting on net.[2] After 2022, annual rates of change are revised up by 0.1 percentage point in 2023 and down by 0.7 percentage point in 2024.

The revisions to capacity growth for recent years are also negative; from 2022 through 2025, capacity growth is revised down in each year, with an average revision of 0.4 percentage point. The revisions from 2018 through 2021 are generally positive and average 0.1 percentage point per year. The cumulative effect of these downward revisions implies that capacity growth now averages 1.1 percent per year after 2021, revised down from 1.5 percent per year, and remains below the long-run historical average (1972–2024) of 1.9 percent.

As with IP and capacity, capacity utilization revised down in recent years. For the 2022–24 period, capacity utilization was 1.7 percentage points lower on average (annual utilization rates are reported as of the fourth quarter). Capacity utilization also revised down modestly in the previous 10 years (2012–21) by, on average, 0.5 percentage point. In the fourth quarter of 2024, capacity utilization for total industry stood at 75.5 percent, 1.7 percentage points below its previous estimate and 4.0 percentage points below its long-run (1972–2024) average.

This revision incorporated newly available annual data on both output and prices. The updated IP indexes incorporated new data for manufacturing from the 2022 EC. In addition, the indexes for metallic and nonmetallic minerals were updated with revised annual data for 2020 through 2022 and with new data for 2023 from the U.S. Geological Survey (USGS). Data on prices for 2022 from the Bureau of Labor Statistics (BLS) were also incorporated into most of the manufacturing indexes.

Revisions to IP indexes for the post-2022 period are based partly on adjustments to the correction factors that are intended to align the input and product data used for estimating monthly IP with the annual benchmark data. In addition, the monthly estimates of production have been updated to include late-arriving or revised quarterly or monthly indicator data, including information from the BLS's benchmark revisions to the Current Employment Statistics. The monthly IP estimates also reflect updated seasonal factors.

The revised estimates of capacity and capacity utilization incorporate data from the Census Bureau's Quarterly Survey of Plant Capacity Utilization (QSPC) for the fourth quarter of 2024 and new data on capacity from the USGS, the Energy Information Administration, and various industry organizations. The revised capacity estimates also include new data on capital spending from the 2022 EC. For more information: (https://www.federalreserve.gov/releases/g17/Revisions/20251124/DefaultRev.htm).

Industrial increased 0.2 percent in Nov 2025 after decreasing 0.1 percent in Oct 2025 and increasing 0.1 percent in Sep 2025, as shown in Table I-1.

The report of the Board of Governors of the Federal Reserve System states (https://www.federalreserve.gov/releases/g17/Current/default.htm): “This release includes preliminary estimates for industrial production (IP) and capacity utilization for both October and November as well as revised estimates for May through September. IP rose 0.2 percent in November after ticking down 0.1 percent in October. On average, IP rose 0.1 percent per month across October and November, the same as the rate of increase in September and a somewhat slower average pace than the past 12 months. Manufacturing output was flat in November after dropping 0.4 percent in October. There were swings in both mining and utilities output over October and November, though, on net, both sectors posted gains. At 101.8 percent of its 2017 average, total IP in November was 2.5 percent above its year-earlier level. Capacity utilization was 76.0 percent in November, a rate that is 3.5 percentage points below its long-run (1972–2024) average.” In the six months ending in Nov 2025, United States national industrial production accumulated change of 0.8 percent at the annual equivalent rate of 1.6 percent, which is lower than growth of 2.5 percent in the 12 months ending in Nov 2025. Industrial production increased at annual equivalent 0.8 percent in the most recent quarter from Sep 2025 to Nov 2025 and increased at 2.4 percent annual equivalent in the prior quarter from Jun 2025 to Aug 2025. Business equipment accumulated change of 1.6 percent in the six months from Jun 2025 to Nov 2025, at the annual equivalent rate of 3.2 percent, which is lower than growth of 11.2 percent in the 12 months ending in Nov 2025. The Fed analyzes capacity utilization of total industry in its report (https://www.federalreserve.gov/releases/g17/Current/default.htm): “Capacity utilization was 76.0 percent in November, a rate that is 3.5 percentage points below its long-run (1972–2024) average.” United States industry apparently decelerated to a lower growth rate followed by possible acceleration, oscillating growth in past months and deep contraction in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). There is renewed decline with oscillating marginal increase and decrease.

Table I-1, US, Industrial Production and Capacity Utilization, SA, ∆%

	Nov 25	Oct 25	Sep 25	Aug 25	Jul 25	Jun 25	Nov 25/ Nov 24
Total	0.2	-0.1	0.1	-0.3	0.4	0.5	2.5
Market Groups
Final Products	0.4	0.0	-0.1	-0.5	0.6	0.3	3.2
Consumer Goods	0.3	-0.1	-0.4	-0.5	0.5	0.4	0.8
Business Equipment	0.3	-0.3	0.9	-0.3	0.9	0.1	11.2
Non Industrial Supplies	-0.3	-0.3	0.2	-0.2	-0.2	0.1	1.2
Construction	-0.6	-1.1	0.8	1.0	-0.6	0.3	2.3
Materials	0.2	0.0	0.1	-0.2	0.4	0.8	2.4
Industry Groups
Manufacturing	0.0	-0.4	0.0	0.0	0.4	0.3	1.9
Mining	1.7	-0.8	-0.7	0.7	0.2	0.7	3.9
Utilities	-0.4	2.6	1.1	3.0	0.5	1.5	4.8
Capacity	76.0	75.9	76.0	76.1	76.4	76.2	1.5

Sources: Board of Governors of the Federal Reserve System

https://www.federalreserve.gov/releases/g17/Current/default.htm

Manufacturing changed 0.0 percent in Nov 2025, decreased 0.4 percent in Oct 2025, Manufacturing changed 0.0 percent in Sep 2025, changed 0.0 percent in Aug 2025, increased 0.4 percent in Jul, increased 0.3 percent in Jun 2025, increasing 2.3 in the 12 months ending in Nov 2025, as shown in Table I-2. Manufacturing increased cumulatively 0.3 percent in the six months ending in Nov 2025 or at the annual equivalent rate of 0.6 percent. Table I-2 provides a longer perspective of manufacturing in the US. There has been evident deceleration of manufacturing growth in the US from 2010 and the first three months of 2011 with recovery followed by renewed deterioration/improvement in more recent months as shown by 12 months’ rates of growth followed by renewed deterioration. Growth rates appeared to be increasing again closer to 4 percent in Apr-Jun 2012 but deteriorated. The rates of decline of manufacturing in 2009 are quite high with a drop of 18.7 percent in the 12 months ending in Apr 2009. Manufacturing recovered from this decline and led the recovery from the recession. Rates of growth appeared to be returning to the levels at 3 percent or higher in the annual rates before the recession, but the pace of manufacturing fell steadily with some strength at the margin. There is renewed deterioration, improvement and current oscillation.

The Board of Governors of the Federal Reserve System conducted the annual revision of industrial production released on May 28, 2021 (https://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm):

Manufacturing decreased 22.4 percent from the peak in Jun 2007 to the trough in Apr 2009. Manufacturing increased 17.7 percent from the trough in Apr 2009 to Aug 2025. Manufacturing decreased 8.6 percent from the peak in Jun 2007 to Aug 2025.

Table I-2, US, Monthly and 12-Month Rates of Growth of Manufacturing ∆%

	Month SA ∆%	12-Month NSA ∆%
11/1/2025	0	2.3
10/1/2025	-0.4	2
9/1/2025	0	1.7
8/1/2025	0	1.3
7/1/2025	0.4	1.7
6/1/2025	0.3	0.3
5/1/2025	-0.1	0
4/1/2025	-0.1	0.1
3/1/2025	0.4	0.7
2/1/2025	1.3	-0.1
1/1/2025	-0.4	-0.1
12/1/2024	0.4	-1.5
11/1/2024	0.2	-1.7
10/1/2024	-0.7	-1.5
9/1/2024	-0.5	-1
8/1/2024	0.5	-0.6
7/1/2024	-0.8	-1.1
6/1/2024	-0.2	-0.2
5/1/2024	0.6	-0.6
4/1/2024	-0.6	-0.8
3/1/2024	0.1	-0.3
2/1/2024	1.3	-0.7
1/1/2024	-1.5	-2.1
12/1/2023	-0.1	1.3
11/1/2023	0.4	-0.5
10/1/2023	-0.5	-1.7
9/1/2023	0.1	-0.9
8/1/2023	-0.1	-0.9
7/1/2023	0.4	-1.3
6/1/2023	-0.7	-1.4
5/1/2023	-0.2	-1.3
4/1/2023	0.9	-0.5
3/1/2023	-0.7	-2.2
2/1/2023	0	-1
1/1/2023	1.7	-0.8
12/1/2022	-1.7	-2.9
11/1/2022	-0.8	-1.4
10/1/2022	0.3	-0.1
9/1/2022	0	1.4
8/1/2022	0	-0.3
7/1/2022	0	-0.5
6/1/2022	-0.6	0.1
5/1/2022	-0.5	0.6
4/1/2022	-0.1	1
3/1/2022	0.5	2.3
2/1/2022	0.6	4.8
1/1/2022	-0.9	0.1
12/1/2021	-0.1	1.8
11/1/2021	0.6	2.8
10/1/2021	1.4	2.5
9/1/2021	-1.2	2.5
8/1/2021	-0.5	3.5
7/1/2021	0.9	6.4
6/1/2021	0	8.7
5/1/2021	1	17.3
4/1/2021	0.2	22
3/1/2021	3.1	2.6
2/1/2021	-4	-5.2
1/1/2021	0.9	-0.8
12/1/2020	0.7	-2.4
11/1/2020	0.5	-2.8
10/1/2020	1	-2.4
9/1/2020	0.1	-5.1
8/1/2020	1.6	-5.1
7/1/2020	3.7	-6.2
6/1/2020	7.7	-10
5/1/2020	4.3	-15.9
4/1/2020	-15.2	-19.9
3/1/2020	-4.6	-5.5
2/1/2020	0.2	-0.8
1/1/2020	-0.3	-1.8
12/1/2019	0.1	-2.6
11/1/2019	0.8	-2.3
10/1/2019	-0.8	-3.4
9/1/2019	-0.8	-3.1
8/1/2019	0.6	-2.3
7/1/2019	-0.7	-2.9
6/1/2019	0.4	-1.9
5/1/2019	0	-1.8
4/1/2019	-0.6	-2.8
3/1/2019	-0.3	-1
2/1/2019	-0.6	-0.9
1/1/2019	-0.9	0.5
12/1/2018	0.3	0.6
11/1/2018	-0.3	0.1
10/1/2018	-0.4	0.3
9/1/2018	0	2.2
8/1/2018	0.2	2.1
7/1/2018	0.1	1.7
6/1/2018	0.6	1.1
5/1/2018	-0.8	0.7
4/1/2018	0.7	2.6
3/1/2018	-0.1	1.9
2/1/2018	0.8	1.8
1/1/2018	-0.3	0.8
12/1/2017	-0.3	1.6
11/1/2017	0.1	1.4
10/1/2017	1.1	1
9/1/2017	0	0
8/1/2017	-0.2	0.4
7/1/2017	-0.4	0.6
6/1/2017	0.1	0.4
5/1/2017	-0.1	0.6
4/1/2017	1.2	-0.6
3/1/2017	-0.3	0.2
2/1/2017	-0.1	0
1/1/2017	0.1	-0.3
12/1/2016	0	-0.1
11/1/2016	-0.1	-0.5
10/1/2016	0.1	-0.5
9/1/2016	0.2	-0.3
8/1/2016	-0.4	-1.6
7/1/2016	0	-1.3
6/1/2016	0.2	-0.5
5/1/2016	-0.1	-1.2
4/1/2016	-0.1	-0.5
3/1/2016	-0.1	-1.6
2/1/2016	-0.3	-0.4
1/1/2016	0.4	-0.7
12/1/2015	-0.3	-1.8
11/1/2015	-0.3	-1.6
10/1/2015	-0.1	-0.7
9/1/2015	-0.3	-1.7
8/1/2015	-0.3	-0.6
7/1/2015	0.8	-0.5
6/1/2015	-0.4	-1.2
5/1/2015	0	-0.3
4/1/2015	0	-0.2
3/1/2015	0.4	-0.2
2/1/2015	-0.7	0.4
1/1/2015	-0.6	1.8
12/1/2014	-0.2	1.5
11/1/2014	0.7	1.6
10/1/2014	-0.1	0.8
9/1/2014	0	1
8/1/2014	-0.6	1.2
7/1/2014	0.4	2
6/1/2014	0.3	1.4
5/1/2014	0.3	1.4
4/1/2014	0	1
3/1/2014	0.9	1.6
2/1/2014	0.9	0.3
1/1/2014	-1	-0.4
12/1/2013	-0.2	0.2
11/1/2013	0	1.2
10/1/2013	0.2	1.9
9/1/2013	0.1	1.3
8/1/2013	0.9	1.4
7/1/2013	-0.8	0.3
6/1/2013	0.2	0.8
5/1/2013	0.3	0.8
4/1/2013	-0.3	0.9
3/1/2013	-0.1	0.5
2/1/2013	0.4	0.6
1/1/2013	-0.2	0.7
12/1/2012	0.7	1.6
11/1/2012	0.6	1.6
10/1/2012	-0.2	0.7
9/1/2012	-0.2	1.7
8/1/2012	-0.2	2.2
7/1/2012	-0.2	2.5
6/1/2012	0.3	3.5
5/1/2012	-0.3	3.4
4/1/2012	0.5	3.8
3/1/2012	-0.5	2.8
2/1/2012	0.4	4.1
1/1/2012	0.8	3.6
12/1/2011	0.7	3
11/1/2011	-0.2	2.6
10/1/2011	0.5	2.8
9/1/2011	0.2	2.7
8/1/2011	0.5	2.1
7/1/2011	0.6	2.3
6/1/2011	0.1	1.8
5/1/2011	0	1.5
4/1/2011	-0.5	2.8
3/1/2011	0.6	4.4
2/1/2011	0.2	4.8
1/1/2011	0	4.8
12/1/2010	0.5	5.4
11/1/2010	0.1	4.6
10/1/2010	0	5.9
9/1/2010	0.1	6.2
8/1/2010	0.1	7
7/1/2010	0.5	7.7
6/1/2010	-0.1	9.4
5/1/2010	1.3	9.1
4/1/2010	0.8	7.4
3/1/2010	1.2	5.3
2/1/2010	0	2
1/1/2010	1	1.9
12/1/2009	-0.1	-2.8
11/1/2009	1	-5.8
10/1/2009	0.1	-9
9/1/2009	1	-10.5
8/1/2009	1.1	-13.7
7/1/2009	1.5	-15.5
6/1/2009	-0.3	-18
5/1/2009	-1.1	-18
4/1/2009	-0.7	-18.7
3/1/2009	-1.8	-17.7
2/1/2009	-0.1	-16.7
1/1/2009	-3.2	-17.1
12/1/2008	-3.3	-14.4
11/1/2008	-2.5	-11.6
10/1/2008	-0.7	-9
9/1/2008	-3.5	-8.6
8/1/2008	-1.3	-5
7/1/2008	-1	-3.5
6/1/2008	-0.7	-3.2
5/1/2008	-0.6	-2.4
4/1/2008	-1	-1.1
3/1/2008	-0.4	-0.5
2/1/2008	-0.7	1
1/1/2008	-0.2	2.4
12/1/2007	0.1	2
11/1/2007	0.5	3.4
10/1/2007	-0.2	2.8
9/1/2007	0.3	2.9
8/1/2007	-0.3	2.7
7/1/2007	0	3.7
6/1/2007	0.4	3.2
5/1/2007	0	3.4
4/1/2007	0.6	3.8
3/1/2007	0.8	2.8
2/1/2007	0.3	1.8
1/1/2007	-0.3	1.4
12/1/2006	1.5	2.9
11/1/2006	0.1	1.4
10/1/2006	-0.5	2
9/1/2006	0.1	3.9
8/1/2006	0.7	2.9
7/1/2006	-0.3	3
6/1/2006	0.3	2.5
5/1/2006	-0.2	2.4
4/1/2006	0.4	1.6
3/1/2006	0	3.3
2/1/2006	-0.3	2.3
1/1/2006	0.8	3.3
12/1/2005	0.1	3.6
11/1/2005	0.9	4
10/1/2005	1.4	3.2
9/1/2005	-1.1	3.1
8/1/2005	0.5	3.9
7/1/2005	-0.3	4.2
6/1/2005	0.2	5
5/1/2005	0.3	4.1
4/1/2005	0.4	5.3
3/1/2005	-0.5	3.5
2/1/2005	0.9	4.4
1/1/2005	0.6	5.3
12/1/2004	0.8	4
11/1/2004	0	2.8
10/1/2004	0.9	3.9
9/1/2004	0	2.6
8/1/2004	0.4	4
7/1/2004	0.9	4.5
6/1/2004	-0.7	2.6
5/1/2004	0.7	3.7
4/1/2004	0.3	2.8
3/1/2004	0	1.8
2/1/2004	0.7	2.2
1/1/2004	-0.1	0.9
12/1/2003	-0.1	2.2
11/1/2003	0.9	2.1
10/1/2003	0.1	1.2
9/1/2003	0.8	1
8/1/2003	-0.5	0.3
7/1/2003	0.3	0.4
6/1/2003	0.5	0.2
5/1/2003	0	0.9
4/1/2003	-0.7	0.7
3/1/2003	0.1	2.6
2/1/2003	-0.1	2.9
1/1/2003	0.8	2.8
12/1/2002	-0.6	2.4
11/1/2002	0.5	3.2
10/1/2002	-0.3	2.8
9/1/2002	0	2.7
8/1/2002	0.1	2
7/1/2002	-0.1	0.8
6/1/2002	1	1.3
5/1/2002	0.5	-0.5
4/1/2002	0.3	-0.1
3/1/2002	0.7	-2.6
2/1/2002	0	-3.1
1/1/2002	0.6	-3.6
12/1/2001	0.2	-5.1
11/1/2001	-0.4	-5.5
10/1/2001	-0.4	-5.3
9/1/2001	-0.4	-5
8/1/2001	-0.4	-3.8
7/1/2001	-0.5	-4
6/1/2001	-0.6	-3.7
5/1/2001	-0.5	-2.8
4/1/2001	-0.4	-3.8
3/1/2001	-0.2	-1.8
2/1/2001	-0.7	-0.9
1/1/2001	-0.4	-0.6
12/1/2000	-0.6	0.5
11/1/2000	-0.3	1.4
10/1/2000	-0.4	2.1
9/1/2000	0.5	4.4
8/1/2000	-0.6	3.2
7/1/2000	0.1	4.8
6/1/2000	0.1	5.1
5/1/2000	0	4.1
4/1/2000	0.6	5.3
3/1/2000	0.6	4.9
2/1/2000	0.2	4.1
1/1/2000	-0.1	5.1
12/1/1999	0.7	5.1
∆% Peak 105.8434 in 06/2007 to 85.6368 04/2009		-19.1
∆% Trough 85.6368 in 04/2009 to 97.7127 in 11/2025		14.1
∆% Peak 105.8434 in 06/2007 to 97.7127 in 11/2025		-7.7

Sources: Board of Governors of the Federal Reserve System

https://www.federalreserve.gov/releases/g17/Current/default.htm

Chart I-1 of the Board of Governors of the Federal Reserve System provides industrial production, manufacturing and capacity since the 1970s. There was acceleration of growth of industrial production, manufacturing and capacity in the 1990s because of rapid growth of productivity in the US (Cobet and Wilson (2002); see Pelaez and Pelaez, The Global Recession Risk (2007), 135-44). The slopes of the curves flatten in the 2000s. Production and capacity have not recovered sufficiently above levels before the global recession, remaining like GDP below historical trend. There is sharp contraction of output followed by continuing recovery in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Chart I-1 of the Board of Governors of the Federal Reserve System provides industrial production, manufacturing and capacity since the 1970s. There was acceleration of growth of industrial production, manufacturing and capacity in the 1990s because of rapid growth of productivity in the US (Cobet and Wilson (2002); see Pelaez and Pelaez, The Global Recession Risk (2007), 135-44). The slopes of the curves flatten in the 2000s. Production and capacity have not recovered sufficiently above levels before the global recession, remaining like GDP below historical trend. There is sharp contraction of output followed by continuing recovery in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth of manufacturing at average 2.8 percent per year from Nov 1919 to Nov 2025. Growth at 2.8 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 108.5636 in Dec 2007 to 178.0579 in Nov 2025. The actual index NSA in Nov 2025 is 96.9756 which is 45.5 percent below trend. The underperformance of manufacturing in Mar-Nov 2020 originates partly in the earlier global recession augmented by the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Manufacturing output grew at average 1.5 percent between Dec 1999 and Dec 2006. Using trend growth of 1.5 percent per year, the index would increase to 141.7537 in Nov 2025. The output of manufacturing at 96.9756 in Nov 2025 is 31.6 percent below trend under this alternative calculation. Using the NAICS (North American Industry Classification System), manufacturing output fell from the high of 105.8434 in Jun 2007 to the low of 85.6368 in Apr 2009 or 19.1 percent. The NAICS manufacturing index increased from 85.6368 in Apr 2009 to 97.7127 in Nov 2025 or 14.1 percent. The NAICS manufacturing index increased at the annual equivalent rate of 3.4 percent from Dec 1986 to Dec 2006. Growth at 3.4 percent would increase the NAICS manufacturing output index from 106.6125 in Dec 2007 to 194.0744 in Nov 2025. The NAICS index at 97.7127 in Nov 2025 is 49.7 percent below trend. The NAICS manufacturing output index grew at 1.7 percent annual equivalent from Dec 1999 to Dec 2006. Growth at 1.7 percent would raise the NAICS manufacturing output index from 105.8434 in Dec 2007 to 144.2034 in Nov 2025. The NAICS index at 97.7127 in Nov 2025 is 32.2 percent below trend under this alternative calculation.

Chart I-1, US, Industrial Production, Capacity and Utilization

Source: Board of Governors of the Federal Reserve System

https://www.federalreserve.gov/releases/g17/Current/ipg1.svg

Additional detail on industrial production and capacity utilization is in Chart I-2 of the Board of Governors of the Federal Reserve System. Production of consumer durable goods fell sharply during the global recession by more than 30 percent and is oscillating above the level before the contraction. Output of nondurable consumer goods fell around 10 percent and is some 5 percent below the level before the contraction. Output of business equipment fell sharply during the contraction of 2001 but began rapid growth again after 2004. An important characteristic is rapid growth of output of business equipment in the cyclical expansion after sharp contraction in the global recession, stalling in the final segment followed by recovery. Output of defense and space only suffered reduction in the rate of growth during the global recession and surged ahead of the level before the contraction, declining in the final segment. Output of construction supplies collapsed during the global recession and is well below the level before the contraction. Output of energy materials was stagnant before the contraction but recovered sharply above the level before the contraction with alternating recent decline/improvement. There are deep contractions in Mar-Apr 2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).

Chart I-2, US, Industrial Production, Capacity and Utilization

Source: Board of Governors of the Federal Reserve System

https://www.federalreserve.gov/releases/g17/Current/ipg3.svg

The modern industrial revolution of Jensen (1993) is captured in Chart I-3 of the Board of Governors of the Federal Reserve System (for the literature on M&A and corporate control see Pelaez and Pelaez, Regulation of Banks and Finance (2009a), 143-56, Globalization and the State, Vol. I (2008a), 49-59, Government Intervention in Globalization (2008c), 46-49). The slope of the curve of total industrial production accelerates in the 1990s to a much higher rate of growth than the curve excluding high-technology industries. Growth rates decelerate into the 2000s and output and capacity utilization have not recovered fully from the strong impact of the global recession. Output of energy materials was stagnant before the contraction but recovered sharply above the level before the contraction with alternating recent decline/improvement followed by stability and renewed contraction. Growth in the current cyclical expansion has been more subdued than in the prior comparably deep contractions in the 1970s and 1980s. Chart I-2 shows that the past recessions after World War II are the relevant ones for comparison with the recession after 2007 instead of common comparisons with the Great Depression (https://cmpassocregulationblog.blogspot.com/2024/02/the-fomc-maintains-fed-funds-rate.html and earlier https://cmpassocregulationblog.blogspot.com/2024/01/us-gdp-grew-at-49-percent-saar-in.html) (https://cmpassocregulationblog.blogspot.com/2022/10/annual-update-of-us-product-and-income.html and earlier https://cmpassocregulationblog.blogspot.com/2022/09/us-gdp-contracting-at-saar-of-06.html). The lower part of Chart I-3 shows recent strong growth of energy compared with non-energy. There are deep contractions in Mar-Apr 2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).