The smartest comments you'll see about the economy this month week

Rosenberg:  [Y]esterday we reported that the NY Empire manufacturing diffusion index came in at -10.41 in September after a -5.85 headline in August...

I find it incredible that so much excitement and emphasis is being placed on the housing recovery which is two percent of the economy and employs two million people and yet very little is being said over the turndown in the manufacturing sector which is closer to a 10% chunk of the economy and represents an employment base closer to 12 million workers. Guess which one dominates? A house is a wonderful thing to enjoy but it is nothing more than a big-ticket consumer good. and it does not exactly add to the productive capital stock like the manufactunng sector does. This is all the Fed talks about practically and even Paul Ryan has said he would never sacrifice mortgage interest deductibility in order to put the nation's fiscal backdrop on a more sound footing. Why is it that the policymakers devote so much time and effort to a part of the economy that doesn't help add to the productwe capltal stock and employs harely more than 1% of the workforce is a legitimate question Even the homebulldmg stocks get more attennon than virtually every other sector of the S&P 500 and yet its market cap rs but 0.1% of the total. Go figure

INDUSTRIAL PRODUCTION
We mentioned last week that industrial production sank 1.2% in August, the worst showing since March 2009 when the Great Recession was at its peak.

Actually, the story is much bigger than that. Since 1960, there have only been three olher occasions when production has fallen by at least 1.2% outside of a recession.

• October 1964: -1.4% GM Strike
• Ianuary 1978: -1.4% Coal Strike
• September 2005: -2.0% Hurricane Katrna

Were there any strikes or hurncanes around lately?

Conslder this as just one more In the litany of times of late when I have concluded that ‘we've only seen this number Inside a recession“ — data quietly whispering something that too many people are ignoring. Something tells me that Bemanke has the same view.