Stock market volatility (which is most notable when it’s downward, as has been present in recent weeks) is sometimes transient noise. At times, however, it can herald/anticipate changes in the trajectory of the economy (in either direction).
Several economic data points were released today.
Capacity Utilization 5 year history:
Capacity Utilization 10 year history:
Business inventories to sales ratios 5 year history:
Business inventories to sales ratios since 2003:
I consider each of these data points worth watching. The information released today for all of them is meaningful in magnitude, trend, and direction… all negative. I take notice.
Sources: Industrial production and capacity utilization (The Federal Reserve); Empire State Manufacturing Survey (Federal Reserve Bank of New York); Empire State Manufacturing Survey-Full Report (The Federal Reserve Bank of New York); All graphs from Bloomberg