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Economy in Brief

U.S. Industrial Production Rose 0.3% and Recouped Half of the October Decline
by Tom Moeller December 14 2007

Industrial production rose 0.3% last month but the increase recovered less than half of the downwardly revised 0.7% drop in October. The Consensus expectation had been for a 0.2% rise.

Factory output also recovered from an October drop that was revised deeper. The 0.4% November increase left the three month change in output at -0.3%.

Output gains were broad based. Production in the motor vehicle & parts industries rose 1.6% and recovered all of the prior month's 1.5% drop. However that still left output down 1.6% from a year earlier. Output of furniture & related products bounced 0.4% (-2.0% y/y) following two months of sharp decline and output of construction supplies was unchanged (1.0% y/y).

Also in the consumer goods sector, production of computers & electronics rose 1.5% (+13.4% y/y). Output of apparel was unchanged (-3.8% y/y) but output of chemical products was down for the fourth straight month (-0.5% y/y).

Output of business equipment rose a solid 1.0% (4.0% y/y). Output of information & processing equipment surged 2.3% (9.3% y/y). Three month growth amounted to 11.9% (AR). Production of industrial equipment inched up 0.2% after a 0.9% October shortfall. Three month growth recovered to 2.7% (AR), well below the 6.7% growth of last year.

In the materials category output rose 0.5% and recovered all of the prior month's decline. Production of durable consumer parts rose 0.9% (5.0 y/y). Production of durable equipment parts surged 1.4% (7.4% y/y) but consumer durable parts output only rose 0.5% (-0.5% y/y) after three months of sharp decline.

Capacity utilization inched up to 81.5% from a revised 81.4% in October. Utilization in the factory sector also rose slightly m/m to 79.8% and averaged 80.2% last year. Capacity rose 0.1% (1.8% y/y).

The Macroeconomics of Oil Shocks from the Federal Reserve Bank of Philadelphia can be found here.

INDUSTRIAL PRODUCTION (SA) November October Y/Y 2006 2005 2004
Total 0.3% -0.7% 2.2% 4.0% 3.2% 2.5%
  Manufacturing 0.4% -0.7% 2.3% 5.0% 4.0% 3.0%
  Mining 1.2% -0.7% 2.2% 2.7% -1.6% -0.6%
  Utilities -1.4% -1.4% 1.2% 0.2% 2.0% 1.4%
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