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Economy in Brief

U.S. Industrial Production Improves
by Tom Moeller  November 16, 2011

Industrial production rose 0.7% during October following a 0.1% September dip, originally reported as +0.2%. The latest increase exceeded Consensus expectations for a 0.4% rise, according to Action Economics. Factory sector output rose 0.4% after a 0.3% September gain. Output of business equipment continued relatively strong with a 1.0% rise and 10.2% during the last 12 months. The y/y gain reflects 22.2% growth in transit equipment, 7.9% in information processing & other, and 6.5% in industrial supplies & other. Consumer goods output rose 0.4% led by a 3.9% rise (12.6% y/y) in autos. Computers, video & audio rose 0.9% (2.2% y/y) and appliance, furniture & carpeting increased 0.3% (3.4% y/y). Nondurables output was unchanged (0.2% y/y), even though clothing production rose 2.9% (-3.2% y/y).

Motor vehicles & parts output jumped 3.1% (8.9% y/y). Less autos, factory output rose 0.3% (3.9% y/y). Output of computers & electronic components rose 0.8% (7.4% y/y) while electrical equipment & appliances jumped another 2.0% (-0.2% y/y). Less autos and high-tech, output rose 0.5% (3.5% y/y). In the soft goods area, apparel output recovered 2.7% (1.4% y/y), chemical output inched up 0.1% (2.3% y/y) and food & beverages rose 0.9% (-0.1% y/y).

Capacity utilization rose to 77.8%. In manufacturing alone, utilization rose to 75.5%, up from the recession low of 64.4%. Overall capacity is estimated to have risen 1.1% y/y following a 2.2% decline during 2010. In the factory sector, capacity rose 0.7% y/y. However, it was roughly 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.

Industrial Production (SA, % Change) Oct Sep Aug Oct Y/Y 2010 2009 2008
Total Output 0.7 -0.1 0.0 4.0 5.3 -11.2 -3.7
 Manufacturing 0.4 0.3 0.2 4.1 5.4 -13.5 -5.0
   Consumer Goods 0.4 0.0 -0.1 2.1 4.3 -7.2 -5.2
   Business Equipment 1.0 0.6 1.4 10.2 7.7 -16.3 -2.5
   Construction Supplies 0.0 0.3 0.1 4.3 3.8 -22.5 -9.7
 Materials 0.9 -0.2 -0.2 4.2 6.3 -11.6 -2.7
 Utilities -0.1 -2.0 -3.2 0.1 4.0 -2.6 -0.1
Capacity Utilization (%) 77.8 77.3 77.4 75.7 74.5 69.1 77.8
 Manufacturing 75.4 75.1 74.9 73.0 71.7 66.2 74.9
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