Industrial Production: Hard Data Continues to Confirm Surveys

Bottom Line: The Federal Reserve's industrial production report for January offered more "hard data" to confirm what the "soft" (survey data) showed for much of the 2nd half of 2022. While not quite as weak as the survey data suggested, IP was flat in January, well below expectations for a rebound, and was revised to show an even more significant decline for December. Durable goods manufacturing rebounded but remained in a downtrend. Auto production was decelerating on a trend basis, while the aerospace industry was still enjoying modest to moderate gains. Overall, the manufacturing sector moved from a tailwind to a headwind for growth over 2022 and looks likely to remain a modest headwind in early '23.