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Economy in Brief

Industrial Output In December Is Lifted By Utilities
by Tom Moeller January 15, 2010

For the U.S. factory sector, 2009 was rough but activity improved as the year went on. For the year as a whole industrial production fell 9.7% following a lesser 2008 decline. In June, however, the decline in activity troughed and since then is up 4.7% helped by an expected 0.6% December increase. Though the latest gain was all due to a rise in utility output with arrival of a winter cold snap, factory sector output alone is up 4.6% from its trough.

Output of consumer goods rose 0.6% during December. Production here is up 4.8% from its trough due to a one-third rise in auto products output and a 4.4% gain in clothing. Computers, video & audio output lagged with a 2.2% rate of increase during the last six months while output of appliances, furniture & carpeting slipped 0.1%. The latter figure, however, shows some stabilization after an 18.0% full year decline. Business equipment output rose 0.9% last month (-9.6% y/y) and reversed the November decline. Moreover, since the June bottom activity has risen 3.2%.

Capacity utilization rose further to 72.0%, its highest level since December 2008 but for the year as a whole the utilization rate dropped to 70.2%. In the factory sector alone utilization held steady m/m at 68.8% but dropped to 67.0% for the year from 75.0% in 2008. Utilization in the primary metals area has risen sharply to 58.9% from a 2009 average of 51.0% with the rebound in output. There's also been rise in utilization in the motor vehicle sector to 52.2% from a low of 36.8% in June but it was 77.0% in 2005. In rise in utilization was accompanied by a 0.1% m/m decline in capacity which was part of a 1.0% December-to-December decline.

The industrial production data are available in Haver's USECON database.

Is the Great Moderation Over? An Empirical Analysis from the Federal Reserve Bank of Kansas City is available  here.

Industrial Production (SA,%) December November October Y/Y 2009 2008 2007
Total Output 0.6 0.6 0.2 -2.1 -9.7 -2.2 1.5
  Manufacturing 0.0 0.9 -0.2 -1.9 -11.2 -3.2 1.4
    Consumer Goods 0.6 0.0 0.6 0.3 -5.1 -2.6 0.9
    Business Equipment 0.9 -0.7 0.6 -9.6 -12.6 -1.1 2.7
    Construction Supplies -2.0 1.5 -1.6 -10.1 -17.7 -6.3 -2.0
    Materials 0.8 1.2 0.1 -0.2 -10.8 -1.9 2.0
  Utilities 6.0 -2.4 2.6 -0.8 -2.6 0.3 3.4
Capacity Utilization (%) 72.0 71.5 71.0 72.7 (Dec. '08) 77.5 80.6
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