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Economy in Brief

U.S. Industrial Production Slips M/M as Forward Momentum Eases
by Tom Moeller  November 17, 2014

Industrial production slipped 0.1% last month following a 0.8% September increase, revised from 1.0%. Manufacturing sector production rose 0.2% (3.4% y/y) following a 0.2% September rise, last month reported as 0.5%. Despite the increase, three-month growth in production fell to -0.4% (AR). The October decline in total production was driven by a 0.8% drop (+9.9% y/y) in mining production and a 0.7% shortfall (-1.3% y/y) in utility output. A 0.2% gain in total production was expected in the Action Economics Forecast Survey.

Business equipment production led last month's factory sector gain with a 0.6% rise. It reflected a 1.3% increase (5.6% y/y) in machinery output and a 0.7% improvement (3.7% y/y) in computers & electronic products. Electrical equipment & appliance production dipped 0.4% (+2.8% y/y), the third decline in the last four months. Consumer goods production declined 0.2% as motor vehicle output fell 1.2% (+4.7% y/y) and paper production slipped 0.2% (-2.4% y/y). Offsetting these declines was a 0.6% rise (9.9% y/y) in furniture production. In the soft goods area, apparel production rose 0.7% (0.2% y/y) and chemical output increased 0.7% (4.2% y/y) as well. Petroleum & coal production ticked 0.1% higher (2.6% y/y).

Within the special aggregate series, high technology industries posted a 0.5% production gain (4.8% y/y) following four straight months of decline. The increase was driven by a 0.6% rise (6.6% y/y) in semiconductors. Computers & office equipment output fell 0.4% (-1.4% y/y). Factory sector production excluding the high-tech sector rose 0.2% (3.4% y/y). Manufacturing production excluding both high-tech and autos also gained 0.2% (3.2% y/y).

The capacity utilization rate fell to 78.9% and remained below the 80.5% high averaged in 2007. In the factory sector, the capacity utilization rate slipped to 77.2%, its lowest level since May. Total industry capacity rose an improved 3.0% y/y while factory sector capacity increased 2.1%.

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.

Monetary Policy Accommodation, Risk-Taking, and Spillovers from the Federal Reserve Board is available here.

Industrial Production (SA, % Change) Oct Sep Aug Oct Y/Y 2013 2012 2011
Total Output -0.1 0.8 -0.2 4.1 2.9 3.8 3.3
Manufacturing 0.2 0.2 -0.5 3.4 2.7 4.1 3.3
  Consumer Goods -0.2 0.4 -1.0 1.4 2.4 1.7 1.5
  Business Equipment 0.6 -0.4 -0.3 4.6 3.6 7.5 5.6
  Construction Supplies 0.2 0.5 -0.1 3.6 4.2 4.6 3.0
Materials -0.2 1.2 0.1 5.7 3.2 4.5 4.7
Utilities -0.7 4.2 0.8 -1.3 2.1 -2.1 -0.2
Capacity Utilization (%) 78.9 79.2 78.8 78.2 78.0 77.3 76.3
 Manufacturing 77.2 77.3 77.3 76.3 76.1 75.5 73.9
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