Industry Data Shows: Massive Contraction Has Continued Throughout Q2 2009
August 15, 2009 · Posted in General Economics
Manufacturing capacity utilization in Q2 2009 has dropped to its lowest level ever since beginning of records, 65.2 percent:
Production of nondurable consumer goods has continued its decline in Q2:
Industrial production of nondurable manufacturing has also continued to decline in Q2:
Same for industrial production of electric and gas utilities:
On a related note, please consider the accompanying and ongoing credit contraction:
As I explained in that article, if we assume the same rate of decline for all the remaining credit classes, then we arrive at a total of $4 trillion in evaporated credit since October 2008.
Also, please consider the unprecedented level of real price declines:
Looking at the detailed table, one can see that owner’s equivalent rent (OER) went up by 1.7%. If we want to calculate the True CPI, we have to replace OER with the Case Shiller home price index, which most recently dropped by 16.8% over the year. If we do this, we get an overall price decline from 1 Year ago of 6.6%. (Last month’s release yielded a real price decline of 6.4%)
An ongoing slump in industry utilization, ongoing credit contraction, record price declines – wherever we look, the data screams deflation at us.