Capacity Utilization Can’t Break Loose
The Lehmann Letter (SM) On May 16 the Federal Reserve reported April’s capacity utilization at 76.7%: http://www.federalreserve.gov/releases/g17/Current/default.htm The chart reveals that capacity utilization reached 80% before the Great Recession and 85% during the 1980s and 1990s expansions. Now it’s stalled in the high 70s. Why? Partly it’s the oil and gas bust. Partly it’s the deindustrialization of America. Capacity Utilization (Recessions shaded) Here’s capacity utilization’s recent record. 2013 January 77.4 February 77.8 March 78.0 April 77.8 May 77.8 June 77.8 July 77.5 August 77.8 September 78.3 October 78.2 November 78.5 December 78.4 2014 January 78.1 February 78.8 March 79.1 April Continue reading