Diane Swonk, Chief Economist
Oct. 16, 2009 – 9:00 a.m. CT
Clunkers Boost Production
Industrial production surprised on the upside by increasing 0.7% in September as auto manufacturers began to replenish inventories in the wake of the widely successful "Cash for Clunkers" program.
That said, production is still down quite substantially from a year ago, and as mentioned in this morning's earlier report, we will need a pickup in exports if we hope to sustain production gains going forward.
Moreover, capacity at our nation's factories continues to hover in the 67% range, near an all-time low, which means we still need to see a lot more in terms of production gains before any of this translates into employment.
On net, we are on the road to recovery, but it is a long and winding road, still marred by a lot of pot holes.
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