European Industrial Production Has Accelerated to the Downside as It Did in the Spring of 2008

Eurostat reports that October industrial production (IP) in the euro area dropped sharply in October, and was down 6.0% in the euro-zone and 4.0% in the EU (17 and 27 countries, respectively).

Please go to the LINK and note the chart of IP since 2003.  It tracks that of the U.S. fairly closely.  It is interesting to note that in 2008, an accelerated downturn in Europe’s IP began well before Lehman collapsed.  It actually began in the spring.  By July and August, IP was dropping at a rapid rate in Europe.  Contemporaneously, in the U.S., GDP data was still being reported as positive, but re-analyses later showed that by spring 2008, the economy was in a significant recessionary trend.

How clear is it now that the accelerated downtrend in IP in Europe in September and October (which could undergo upward revisions) will not be matched by revisions downward in that of the U.S.?

This concept is at the core of ECRI’s argument that the U.S. is in an unrecognized recession.

Obviously, this is very interesting stuff for analysts such as the writers at The Daily Capitalist but the real-world ramifications of getting it right for the central authorities, businesspeople, and consumers is of great importance.


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