Data released today, Tuesday, revealed a contraction in the pace of U.S. industrial production, coming in worse than market expectations for the second consecutive month. According to the data released today, the industrial production index recorded a contraction of 0.5% in June, at a time when markets expected the industrial production index to remain stable at zero levels (0.0%) during the same period, after it had recorded a contraction of 0.2% in May, which was revised downward to record a contraction of about 0.5%.

It is worth noting that this index measures the change in the value of inflation-adjusted output produced by factories, mines, and public utilities. Therefore, this index is one of the leading indicators that reflect the health of the economy, as production is quickly affected by the business cycle, and it is also linked to the consumer situation regarding employment and wage levels.

The industrial production index is also considered one of the leading indicators for measuring the health of the economy, as production is quickly affected by business cycle fluctuations, in addition to its connection to consumer conditions such as employment levels and profits. Also, industrial production and capacity utilization rates not only reflect trends in the manufacturing sector, but the two indicators clarify whether capacities are being sufficiently utilized to anticipate inflation rates or not? In addition, industrial production measures the current outputs of the economy. It helps identify turning points in the business cycle (beginning of a recession and the start of recovery).