Industrial production data provides a useful early warning indicator of problems in the real sector. It is a rough measure of physical production, and therefore has a strong bias towards tracking activity in mining, manufacturing and energy sectors.
The latest industrial production data for the US is horrifying. In December, the number is down 8 percent compared to the same month a year earlier. Taken together with the December US employment number, which was down half a million jobs, it is now clear that the US economy is in the midst of a terrible output decline.
The fourth quarter US GDP number is going to be really ugly.