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Economy in Brief

U.S. Industrial Production Records a Surprising Gain
by Tom Moeller  April 16, 2014

Industrial output in the U.S. increased 0.7% last month (3.7% y/y) following a 1.2% jump during February, initially reported as 0.6%. A 0.5% gain in total production was expected in the Action Economics Forecast Survey. Production in the factory sector rose 0.5% (2.8% y/y) after a revised 1.4% February spike, last month reported as 0.8%. Utility output strengthened 1.0% (8.2 y/y) with lingering cold temperatures.

Consumer goods output posted a 0.7% rise (3.2% y/y) after a 1.4% increase, revised from 0.8%. The gain was paced by a 3.4% rise (5.0% y/y) in apparel production, rebounding after two months of shortfall. Textile output also rose 2.5% (-1.1% y/y) following three months of decline. Furniture production gained 2.0% (3.4% y/y) after two months of sharp decline. Paper output also gained 1.1% (-2.9% y/y) after two months of lessened activity. Computer & electronic components production rose 0.9% (6.0% y/y), strong for the third straight month. Electrical equipment and appliance production increased 0.8% (3.1% y/y) and chemical output gained 0.3% (2.0% y/y). To the downside, motor vehicle & parts output declined 0.8% (+5.4% y/y) after a 6.9% February rebound. Primary metals production fell 1.5% (+1.5% y/y), reversing its February rise and food and beverage output fell 0.3% (+1.1 y/y) after a 1.8% jump.

Within the special aggregate series, high technology industries posted a 0.7% production gain (8.3% y/y), led by a 1.4% rise (7.2% y/y) in computer output. Factory production excluding the high tech area rose 0.5% (2.6% y/y). Manufacturing production excluding both high tech and autos rose 0.6% (2.4% y/y) on the heels of a 1.1% jump.

The capacity utilization rate rose to 79.2% last month from a downwardly revised 78.1%. That remained below the 80.5% high averaged in 2007. In the factory sector, the capacity utilization rate improved to 76.7% and remained below the 78.6% level before the recession. Total industry capacity rose a roughly stable 2.2% y/y while factory sector capacity increased 2.0%.

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) Mar Feb Jan Mar Y/Y 2013 2012 2011
Total Output 0.7 1.2 -0.2 3.7 2.9 3.8 3.3
Manufacturing 0.5 1.4 -0.9 2.8 2.7 4.1 3.3
  Consumer Goods 0.7 1.3 -0.7 3.2 2.4 1.7 1.5
  Business Equipment 0.5 2.0 0.0 3.2 3.6 7.5 5.6
  Construction Supplies 0.2 1.0 -0.2 3.0 4.2 4.6 3.0
Materials 0.9 0.9 0.0 4.4 3.2 4.5 4.7
Utilities 1.0 -0.3 3.4 4.3 2.1 -2.1 -0.2
Capacity Utilization (%) 79.2 78.1 78.4 78.0 77.9 77.3 76.3
 Manufacturing 76.7 76.5 75.5 76.1 76.1 75.5 73.9
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