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Economy in Brief

U.S. Industrial Production Falls 0.2% for Second Straight Month
by Tom Moeller  November 17, 2015

Overall industrial output eased 0.2% during October (+0.4% y/y), repeating an unrevised September dip. The Action Economics Forecast Survey expected a 0.1% fall. A 2.5% decline (-1.5% y/y) in utility output accounted for most of last month's shortfall in production. Mining output also fell 1.5% (-6.9% y/y).

Manufacturing sector production recovered 0.4% (1.9% y/y) following two months of 0.1% decline. Motor vehicle & parts production improved 0.7% (10.9% y/y) after a 0.5% rise. Output of computers & electronic products recovered  0.2% (+0.7% y/y) after a 0.1% dip, while appliance, furniture & carpeting output strengthened 0.8% (3.5% y/y) after a 1.2% jump. In the nondurables consumer goods sector, output was off 0.4% (1.9% y/y) as food products production fell 0.5% (+2.4% y/y). Clothing output declined 2.7% both m/m and y/y after two months of decline. Chemical product manufacturing strengthened 1.1% (4.5% y/y) following a 0.6% increase. Business equipment production gained 0.2% (0.5% y/y) after dropping 0.5%. Production of industrial & other equipment increased 0.8% (-0.5% y/y), but information processing equipment output fell 0.3% (+0.7% y/y). Construction output jumped 1.7% (1.6% y/y), more-than- offsetting a 1.3% decline in September.

The special aggregate series indicated that production in high technology industries improved 0.7% (0.1% y/y) after a 0.5% increase. Computers & office equipment production fell 0.3% (+5.8% y/y), down for the third straight month, but communications equipment production recovered 0.3% (-2.6% y/y) after four months of decline. Manufacturing production, excluding both high-tech and autos, increased 0.3% (1.2% y/y) following a 0.1% dip.

The capacity utilization rate increased to 77.5% but remained below the recovery high of 79.0% reached in November. Mining sector utilization moved lower m/m to 80.5% and remained down from its 91.7% high reached in December. In the factory sector, the capacity utilization rate improved m/m to 76.4%, but data revisions raised the rate to roughly its recovery high. Industrial capacity increased 1.5% y/y, 1.2% in the factory sector.

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) Oct Sep Aug Oct Y/Y 2014 2013 2012
Total Output -0.2 -0.2 0.1 0.4 3.7 1.9 2.8
Manufacturing 0.4 -0.1 -0.2 1.9 2.5 0.9 2.7
    Consumer Goods -0.1 0.2 0.2 3.5 2.2 1.5 -1.3
    Business Equipment 0.2 -0.5 0.6 0.5 4.8 -0.4 9.9
    Construction Supplies 1.7 -1.3 0.3 1.6 3.9 2.8 4.3
  Materials -0.4 -0.3 -0.2 -0.5 5.1 3.1 4.1
Utilities -2.5 1.2 1.6 -1.5 1.0 2.5 -2.1
Capacity Utilization (%) 77.5 77.7 78.0 78.5 78.1 76.7 76.7
 Manufacturing 76.4 76.2 76.3 75.8 75.3 74.0 74.5
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