Poor Industrial Production for August 2012 Hurts Obama

While President Obama is still statistically likely to win November’s election, several recent developments have emerged that lower those chances substantially. The more widely discussed issue is the outbreak of violence around the Muslim world against US interests. The other issue that we’ll discuss in this article is a government report from last week showed a major decline (1.2%) in overall industrial production for August 2012.

Why is a decline in industrial production bad news for President Obama? With the economy still limping along, President Obama has been relying on the overall narrative that he is rebuilding the manufacturing base of America and setting the foundation for long term growth. But negative manufacturing trends don’t support this story and undermine one of the few positive economic indicators that President Obama had going for him.

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  1. Nikki Babin's Gravatar Comment by Nikki Babin on September 17th, 2012 at 11:52 am

    Perhaps these numbers reflect an American version of “Dutch Disease” (good primer video (albeit directed at the Canadian economy) for those new to the concept: http://share.fpconversations.com).

    The lack of industrial productivity isn’t perfectly analogous (obviously) and should be concerning for BHO, but I wonder if this might be a “labour force” side issue.

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