Industrial Production Down, Stocks Slump Slightly
Stocks fell today, albeit slightly, as reports came in indicating industrial production had risen less than initially forecasted. The S&P 500 fell 0.2 percent while the Dow dropped less than 0.1 percent. A money manager who spoke with Bloomberg said the production numbers indicate "weak manufacturing in the United States as well as weak demand."
While industrial production may not be growing as fast as hoped, there still is growth in the market. October's output rose a total of 0.1 percent and wholesale prices have recovered some since their September drop. The average growth that had been forecasted was 0.4 percent, with some economics estimating a growth of up to 1.2 percent. It's reassuring that levels are on the rise, but disconcerting to find them coming up so short of estimates.
With stocks peaking levels at their highest levels since October 2008 yesterday, this minor drop doesn't have that great an effect, but may serve as a reminder to avoid overconfidence about the strength of the U.S. economy. Though stocks are often considered a leading indicator, with unemployment numbers higher than expected and production growth diminished, the recent gains in the stock market may turn out to be unsustainable over the course of the next several months.