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Economy

IIP at 4.22% But Big Past Revisions Make It Unreliable

The Index of Industrial Production (IIP) for July 2015 moved up 4.22% from a year ago. Even last month’s numbers were revised upwards to 4.36% (from 3.78%) and April’s numbers were revised down to 3.01% (the first reported number was 4.05%). So it’s all a little complicated.

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The Growth has come from manufacturing (which is, in any case, 75% of the index)

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And the use-based indexes show a drop in consumer non-durables below 0%, a continued upmove in durables (after a horrible year last year) and a return to double digit growth for capital goods:

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Our View

We think this is okay. 4% is not much but hopefully the next few months will be better. The drop in consumer durables is a worry, but a lot of the other businesses have picked up. The big past revisions mean we cannot easily trust this data, so use pinches of salt appropriately.