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Economy in Brief

Industrial Production Off Due to Warm Weather
by Tom Moeller February 15, 2006

Overall industrial output fell last month by 0.7% following an upwardly revised 0.9% rise during December. The decline, however, wholly reflected the warm temperatures which reduced utility output by 10.2% (-4.7% y/y). Consensus expectations had been for a 0.3% increase in total output.

Factory sector production increased 0.7% (4.5% y/y) following a December increase of 0.4% that was double the initial estimated gain.

A rebound in output of motor vehicles & parts accounted for only some of last month's factory output gain as a 2.3% m/m increase still left production 3.8% below last June's level. Excluding motor vehicles, factory output rose 0.5% (4.7% y/y). Output of appliances, furniture & carpeting recovered 2.1% (3.2% y/y) following three months of decline and clothing output rose 0.3% (1.6% y/y), the third straight monthly increase.

Output of business equipment rose a strong 1.0% (10.7% y/y) led by a 1.6% (24.3% y/y) increase in high tech output. Excluding the high tech sector, factory output rose 0.6% (3.3% y/y) and excluding both autos & high tech factory output rose 0.5% (3.3% y/y).

Total capacity utilization fell to 80.9% but factory sector utilization rose to 80.5%, the highest level since 2000.

Today's testimony by Federal Reserve Board Chairman Ben S. Bernanke is available here.

The complete Monetary Policy Report and the Economic Outlook can be found here.

Production & Capacity Jan Dec Y/Y 2005 2004 2003
Industrial Production -0.2% 0.9% 3.2% 3.2% 4.1% 0.6%
  Consumer Goods -0.4% 0.3% 1.8% 2.1% 2.1% 1.0%
  Business Equipment 1.0% 0.6% 10.7% 9.0% 9.3% 0.0%
Capacity Utilization 80.9% 81.2% 79.8% (1/05) 80.1% 78.6% 75.7%
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