Current Issues in Economics and Finance
The Relationship between Manufacturing Production and Goods Output
August 2004 Volume 10, Number 9
JEL classification: E32, E23, C82

Author: Charles Steindel

The sharp divergence in the 2001 recession between two key economic indicators—manufacturing production and goods output—could suggest that one indicator is flawed, casting doubt on the reliability of its overall series. This analysis finds no evidence of error. Rather, the strength of spending on consumer—relative to capital—goods and the growth of merchandising services in the sale of consumer goods more likely explain the recent deviation.

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