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Economy in Brief

U.S. Industrial Output Is Unchanged But Factory Gain Is Solid
by Tom Moeller  February 15, 2012

Industrial production was unchanged last month (3.3% y/y) following a revised 1.1% December rise, initially reported as 0.4%. The latest figure disappointed Consensus expectations for a 0.7% rise, according to Action Economics. Factory sector output rose a firm 0.7% (4.6% y/y) after a strengthened 1.5% December gain. Warm temperatures again lowered utility output by 2.5% last month (-7.5% y/y), down for the fifth month in the last six.

Business equipment production again was the bright spot in the factory sector. It posted a 1.8% increase after December's 1.4% rise which was double the initial estimate. During the last twelve months, output was up a strong 10.9% and equaled last year's rise. This y/y gain again reflects a one-quarter y/y rise in transit equipment, 7.5% growth in information processing & other and a 6.3% rise in industrial supplies & other. In the consumer sector where output slipped 0.1% (+0.5% y/y), auto production jumped 5.9% (17.0% y/y) while computers, video & audio posted a modest 0.5% rise (1.0% y/y). Appliance, furniture & carpeting production also ticked up 0.1% (5.9% y/y). Nondurables output fell 1.2% (-2.3% y/y), held down by energy, but clothing production recovered 2.4% (-2.8% y/y). Excluding the high-tech & motor vehicle industries, industrial production fell 0.3% last month (2.8% y/y) following a 0.8% December rise.

Capacity utilization held roughly stable m/m at 78.5%. In manufacturing alone, utilization rose m/m to 77.0%, up from the recession low of 64.4%. Overall capacity is estimated to have risen 1.2% y/y following a 2.2% decline during 2010. In the factory sector, capacity rose 0.9% y/y. It was up 0.3% excluding the high-tech industries -- after four years of decline.

Industrial production and capacity data are included in Haver's USECON database, with additional detail in the IP database. The expectations figure is in the AS1REPNA database.

Industrial Production (SA, % Change) Jan Dec Nov Jan Y/Y 2011 2010 2009
Total Output 0.0 1.1 -0.1 3.3 4.2 5.3 -11.2
 Manufacturing 0.7 1.5 -0.2 4.6 4.5 5.4 -13.5
   Consumer Goods -0.1 0.9 -0.6 0.5 2.0 4.3 -7.2
   Business Equipment 1.8 1.4 0.6 10.9 10.8 7.7 -16.3
   Construction Supplies -0.4 3.0 0.1 5.3 5.1 3.8 -22.5
 Materials -0.4 0.9 0.4 3.5 4.6 6.3 -11.6
 Utilities -2.5 -2.5 0.1 -7.5 -0.1 4.0 -2.6
Capacity Utilization (%) 78.5 78.6 77.9 76.9 77.3 74.5 69.1
 Manufacturing 77.0 76.5 75.4 74.3 74.9 71.7 66.2
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