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09/06/2013

Is Steel Production a Relevant Indicator?

It has been over two years since I last looked at this topic and it was now about 17 years ago, when I was at PIMCO Funds, that I was doing a series of conference calls with bond guru Bill Gross. One time I asked him if he could pick one economic indicator to use as a barometer of the health of the U.S. economy, what would it be? He said, ‘steel production.’ I got a kick out of that because on handwritten spreadsheets since March 1990, I have been tracking steel, which you can find in Barron’s each week. One problem, I don’t look at it enough. [As for Gross, I doubt he would have the same answer today but I don’t know for sure.]

So I thought we’d take a look at similar periods in time to see how the steel indicator can reflect trends in the overall economy...in this case from boom to bust to recovery.

The following are weekly data, steel production in tons (000s).  

6/29/07-8/31/07

2101
2067
2102
2124
2118
2078
2058
2043
2078
2114

7/4/08-9/5/08

2108
2096
2081
2114
2142
2113
2142
2167
2125
2087

7/3/09-9/4/09

1161
1168
1213
1246
1254
1269
1277
1285
1304
1311

7/2/10-9/3/10

1763
1752
1722
1726
1742
1706
1714
1689
1730
1698

7/1/11-9/2/11

1871
1853
1848
1879
1830
1858
1879
1883
1888
1861

6/29/12-8/31/12

1854
1881
1869
1843
1837
1846
1863
1899
1876
1863

6/28/13-8/30/13

1881
1822
1876
1881
1904
1871
1888
1862
1878
1861

Well I’d say the above graphically illustrates the Great Recession and our recovery since then. But you can also see how after the initial surge after the economy bottomed out that we’ve largely been treading water since, which is reflected in the tepid GDP data.

For my part, I’m going to be looking for figures in the 2000s again as one solid indicator of growth in excess of 2.5% going forward.

Wall Street History returns in two weeks.

Brian Trumbore

 



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Wall Street History

09/06/2013

Is Steel Production a Relevant Indicator?

It has been over two years since I last looked at this topic and it was now about 17 years ago, when I was at PIMCO Funds, that I was doing a series of conference calls with bond guru Bill Gross. One time I asked him if he could pick one economic indicator to use as a barometer of the health of the U.S. economy, what would it be? He said, ‘steel production.’ I got a kick out of that because on handwritten spreadsheets since March 1990, I have been tracking steel, which you can find in Barron’s each week. One problem, I don’t look at it enough. [As for Gross, I doubt he would have the same answer today but I don’t know for sure.]

So I thought we’d take a look at similar periods in time to see how the steel indicator can reflect trends in the overall economy...in this case from boom to bust to recovery.

The following are weekly data, steel production in tons (000s).  

6/29/07-8/31/07

2101
2067
2102
2124
2118
2078
2058
2043
2078
2114

7/4/08-9/5/08

2108
2096
2081
2114
2142
2113
2142
2167
2125
2087

7/3/09-9/4/09

1161
1168
1213
1246
1254
1269
1277
1285
1304
1311

7/2/10-9/3/10

1763
1752
1722
1726
1742
1706
1714
1689
1730
1698

7/1/11-9/2/11

1871
1853
1848
1879
1830
1858
1879
1883
1888
1861

6/29/12-8/31/12

1854
1881
1869
1843
1837
1846
1863
1899
1876
1863

6/28/13-8/30/13

1881
1822
1876
1881
1904
1871
1888
1862
1878
1861

Well I’d say the above graphically illustrates the Great Recession and our recovery since then. But you can also see how after the initial surge after the economy bottomed out that we’ve largely been treading water since, which is reflected in the tepid GDP data.

For my part, I’m going to be looking for figures in the 2000s again as one solid indicator of growth in excess of 2.5% going forward.

Wall Street History returns in two weeks.

Brian Trumbore