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Economy in Brief

U.S. Industrial Production Dips M/M As Temperatures Warm; Yearly Gain Strengthens
by Tom Moeller  January 16, 2015

Industrial production ticked 0.1% lower last month (+4.8% y/y) following an unrevised 1.3% jump. The latest gain was held back by a 7.4% slump (-5.4%) in utility output. The 4.3% average annual gain in total output, however, was the strongest since 2010. Manufacturing sector production improved 0.3% (4.9% y/y) following a 1.3% rise, revised from 1.1%. For the year, factory output rose 3.6%, in the range of increases during the last four years. The December dip matched expectations in the Action Economics Forecast Survey.

Consumer goods production declined 1.2% last month (+2.0% y/y) as nondurable goods output was off 1.3% (+0.9% y/y) and durable goods production declined 0.5% (+5.4% y/y). Motor vehicle & parts production fell 0.9% (+7.0% y/y) but appliance & furniture output rose 1.4%. Business equipment production nudged 0.1% higher (7.5% y/y). A 1.5% rise in information processing equipment offset a 0.9% decline (+5.3% y/y) in transit equipment.

Within the special aggregate series, high technology industries production ticked 0.1% higher (6.3% y/y). It was restrained by a 2.8% decline (-0.1% y/y) in computers & office equipment after a 1.0% jump. Factory sector production excluding the high-tech sector rose 0.3% (4.9% y/y) following a 1.3% increase. Manufacturing production excluding both high-tech and autos improved 0.4% (4.6% y/y) after a 1.0% rise.

The capacity utilization rate fell to 79.7% from its recovery high of 80.0%. For the year, utilization averaged 78.0%, the highest level since 2007. In the factory sector, the capacity utilization rate was unchanged at 78.4%, the expansion high. During all of last year, the utilization rate of 76.1% was the highest since 2007. Total industry capacity rose an improved 3.2% y/y in December while factory sector capacity increased 2.2% y/y.

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) Dec Nov Oct Dec Y/Y 2014 2013 2012
Total Output -0.1 1.3 0.0 4.8 4.3 2.9 3.8
Manufacturing 0.3 1.3 0.2 4.9 3.6 2.7 4.1
  Consumer Goods -1.2 2.6 -0.1 2.0 2.9 2.4 1.7
  Business Equipment 0.1 1.3 1.0 7.5 5.3 3.6 7.5
  Construction Supplies 1.5 0.1 0.5 6.7 4.3 4.2 4.6
Materials 0.4 0.8 -0.2 6.5 5.2 3.2 4.5
Utilities -7.4 4.2 0.5 -5.4 1.2 2.1 -2.1
Capacity Utilization (%) 79.7 80.0 79.2 78.5 79.2 78.0 77.3
 Manufacturing 78.4 78.4 77.5 76.4 77.2 76.1 75.5
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