Industrial production
The Fed's industrial production index measures physical output — factories, mines, utilities — monthly. It's a volume measure, not a value one: it counts what got made, not what it sold for. That makes it the cleanest monthly read on the goods economy.
What it captures — and misses
Manufacturing is only ~10% of US GDP now, but it's the most cyclical tenth — goods demand collapses first in downturns, services last. IP is an NBER recession-dating input: sustained declines in production coincide with nearly every dated contraction. 2015–16 showed the limit: a manufacturing recession that never spread to the rest of the economy.
On this monitor
The IP decline signal tracks sustained weakness in the series; the CFNAI — which embeds IP among its 85 components — adds breadth by confirming whether the production decline is isolated or economy-wide. IP alone can produce sector-specific false positives; the composite absorbs that.