One can get an idea of how bad this recession is compared to previous ones at the St. Louis Fed’s Recession Watch. They haven’t updated the pictures to account for today’s industrial production release (-1.8% vs. Bloomberg consensus -1.5%), so I will convey the situation in two graphs. To sum up, industrial production is lower than at the corresponding point in any previous post-War recession. For manufacturing output, the same is true back to the 1973 recession (as far back as this series goes).

Figure 1: Log industrial production (Jan. 2009 vintage), normalized to 0 at peak. Current recession (blue), 1981 recession (black). Source: FRB via FRED II (accessed 2/18/09), and NBER.



Figure 2: Log manufacturing production (Jan. 2009 vintage), normalized to 0 at peak. Current recession (blue), 1981 recession (black). Source: FRB via FRED II (accessed 2/18/09), and NBER.

It is interesting to see how fast output has declined in the past six months; industrial production has declined 9.3% (in log terms) since 2008M07, and manufacturing production by 12.3%. The three month rate of decline (annualized, log terms) is 21.7% and 31.7% respectively. See Haver’s coverage for more. The news from Empire State Index does not bode well for February. The Bloomberg consensus for the Philly Fed’s Index is -26.0, less than last month’s -24.3. We’ll see if the news is worse than anticipated at 10am on Thursday.

[Update - 9pm]

Spencer at AB scooped me.

Last 5 posts by Menzie Chinn

• Some Thoughts Elicited by Reading Some Calibration Papers - November 5th, 2009
• Prospects for Employment under Differing Econometric Specifications - November 2nd, 2009
• On Revisions and on Conditioning - October 31st, 2009
• The 2009Q3 Advance GDP Release and Stimulus Measures - October 29th, 2009
• Futures As Predictors of Commodity Prices - October 29th, 2009