Did the So-Called Recession Just End?

Did the so-called recession just end?“Recession Canceled: U.S. Industrial Production Jumps To Record High”: That was this morning’s headline in the Zero Hedge website.Too often overlooked, industrial production is a crucially important supply-side indicator of the health of the economy.The February index moved to 104.2, just barely topping the prior record registered during President Trump’s first term in late 2018.When you look under the hood of the production index, it’s even better.Manufacturing increased nine-tenths of 1 percent led by motor vehicles and parts which jumped an incredible 8.5 percent for the month.High tech output rose 1.4 percent in February and is now up more than 26 percent at an annual rate over the past 3 months.And then business equipment, which is so important, was up 1.6 percent in February and almost 24 percent annually over the past 3 months.The giant gain in February’s business equipment may well be driven by expectations of a return to 100 percent immediate expensing, including factory construction — which is a new add-on wrinkle to Mr. Trump’s pro-growth program.It’s also possible that foreign investment is adding torque to the manufacturing and equipment numbers — front-running the April 2 announcement of Mr. Trump’s reciprocal trade policy.The glitch here is that many domestic companies may have been front-running the trade policy by stocking up on foreign imports in January — which technically would depress gross domestic product.Yet when you see production, manufacturing and business equipment surging, that shows a fundamentally healthy supply-side of the economy.And the demand side was also pretty good in February, as the core retail sales number jumped 1 percent and is now running 3.8 percent annually over the past 3 months.Additionally, housing starts surged in February by more than 11 percent.Housing has been in a slump in recent years and the Trump administration has embarked on a major deregulation plan to free up land and somehow stop blue state localities from choking off any new construction.Yet at least mortgage rates have dropped by nearly half a percentage point to 6.6 percent — and that could spur something of a housing rebound.And what’s more, the inflation readings for February all came in on the tamed side.Of course liberal journalists have been pushing a quote “tariffs are a disaster” narrative.We’re going into a recession, they say.No, wait a minute, inflation is gonna go sky-high they say.No, hang on, it’s tariffs that are destroying the stock market.Actually, all these unproven theories are likely to turn out very wrong. Even though the liberals are trying so hard to stick it to Mr. Trump.Oh, one final thought: Republicans in the House and Senate must get moving on the tax cut program. That will sink the recessionistas once and for all.From Mr. Kudlow’s broadcast on Fox Business Network.

Did the So-Called Recession Just End?

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