We had our first look at manufacturing conditions in February (NY Fed Empire Survey came in below consensus by a few points) and tomorrow we have the industrial production report for the US. What should we expect when that report comes out? Well, if the recent results out of the regional Fed PMI surveys are any indication, industrial production might disappoint.
We have created several diffusion indexes measure the 1-month, 3-month, 6-month and 12-month change in 12 federal reserve PMI surveys. When a survey improves over a given time frame, it registers are +1 and when a survey deteriorates over a given time frame it registers a -1. For January, 11 out of the 12 Fed surveys declined from the previous month. Over the past three months and six months, nine out of the twelve surveys have declined. Finally, over the past year, eight surveys are lower and four surveys are higher.