Going Down Fast

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from OurFuture.org:



Going Down Fast
By Charles McMillion

October 16th, 2008 - 10:54am ET



Four important economic reports today show the real economic downturn is worsening very rapidly.

The Federal Reserve reports that industrial production plunged 2.8 percent in September following a plunge of 1.0 percent in August. The plunge in industrial output in September is the worst one-month loss since December 1974 as the first OPEC oil-price hike devastated U.S. industry. Part of the September shut-down was the result of Gulf Coast storms, but even with the far greater devastation of Katrina, output fell only for one month and that was a 1.8 percent decline in September 2005.

Indeed, industrial production (which includes mining and utilities as well as manufacturing) has now plunged in seven of the past eight months and by 4.5 percent yr/yr. Over just the past three months (July to September) U.S. output plunged by 3.8 percent; again the worst three month plunge since early 1975 and one of the worst in U.S. history. Manufacturing output plunged by 2.6 percent in September, the worst one-month plunge since May 1980, when the Federal Reserve slammed on the monetary policy brakes, sending interest rates skyrocketing. Manufacturing production has fallen in six of the past eight months and by 4.8 percent year over year.

Over the 82 months of the current business cycle, industrial and manufacturing output growth have been the weakest since the cycle that began in 1927 and roughly one-fourth the average cyclical strength for all industrial output and one-sixth the average strength in manufacturing.

Even as the U.S. continues to import more than $125 billion of manufactured goods each month, manufacturing firms within the U.S. now have over one-quarter of their existing productive capacity sitting expensively idle. This means there will be very little new business investment so long as consumer spending remains extremely weak. ......(more)

The complete piece is at: http://www.ourfuture.org/blog-entry/2008104216/going-down-fast