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Economy in Brief

U.S. Industry Produces A Bland Recovery
by Tom Moeller  October 17, 2011

Industrial production rose just 0.2% last month following no change during August, originally reported as +0.1%. The latest increase matched Consensus expectations, according to Action Economics. Factory sector output was somewhat more inspiring as it rose 0.4% and matched the August increase. Output of business equipment has shown the most strength of this recovery with a 1.0% rise last month. The y/y gain of 10.3% reflects 18.6% y/y growth in transit equipment, 8.1% growth in industrial & other and a 7.9% gain in information processing & other. Consumer goods output edged up just 0.1% last month. The relatively weak 1.5% y/y increase reflected a 7.9% increase in durables but a 0.2% slip in nondurables. (Overall, nondurable consumer goods have roughly three-times the value of durables.)

Automotive products output rose 1.6% (11.1% y/y). Less autos, factory output rose 0.3% (3.6% y/y). Output of computers & electronic components rose 0.9% (7.0% y/y) while electrical equipment & appliances jumped 1.3% (0.1% y/y). Less autos and high-tech, output rose 0.3% (3.6% y/y). In the soft goods area, apparel output fell 1.1% (+1.6% y/y), chemical output inched up 0.2% (0.8% y/y) and food & beverages rose 0.2% (-0.3% y/y).

Capacity utilization ticked up to 77.4%. In manufacturing alone, utilization rose moderately to 75.1%, up from the recession low of 64.4%. Overall capacity is estimated to have risen 1.0% y/y following a 2.2% decline during 2010. In the factory sector, capacity rose 0.6% y/y. However, it was unchanged less the high-tech industries.

Industrial production and capacity data are included in Haver's USECON database, with additional detail in the IP database. The IP database contains figures with more decimal precision and includes extensive lists of "relative importance" numbers for several breakdowns of production by industry and market group. The expectations figure is in the AS1REPNA database.

Economic Outlook and a Perspective on Monetary Policy from Charles I. Plosser, President, Federal Reserve Bank of Philadelphia can be found here.

Industrial Production (SA, % Change) Sep Aug Jul Sep Y/Y 2010 2009 2008
Total Output 0.2 0.0 1.1 3.3 5.3 -11.2 -3.7
 Manufacturing 0.4 0.3 0.7 3.9 5.4 -13.5 -5.0
   Consumer Goods 0.1 -0.1 1.0 1.5 4.3 -7.2 -5.2
   Business Equipment 1.0 1.4 1.1 10.3 7.7 -16.3 -2.5
   Construction Supplies 0.3 0.1 0.8 4.3 3.8 -22.5 -9.7
 Materials 0.1 -0.1 1.1 3.1 6.3 -11.6 -2.7
 Utilities -1.9 -2.9 2.8 -3.6 4.0 -2.6 -0.1
Capacity Utilization (%) 77.4 77.3 77.4 75.7 74.5 69.1 77.8
 Manufacturing 75.1 74.9 74.7 72.7 71.7 66.2 74.9
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