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Economy in Brief

U.S. Industrial Production Is Unchanged; Factory Output Improves
by Tom Moeller  November 16, 2016

Industrial output was steady during October (-0.9% y/y) following a 0.2% September decline, revised from a 0.1% increase. An August decline of 0.1% was revised from -0.5%. The unchanged October reading disappointed expectations for a 0.2% rise in the Action Economics Forecast Survey.

Factory sector production increased 0.2% last month (-0.2% y/y), the same as in September. Consumer goods production fell 0.2% (+0.5% y/y) after a 0.1% easing. In the durable goods sector, computers and video & audio equipment production jumped 1.7% (-3.0% y/y) after two consecutive 2.3% declines. Furniture & appliance production rose 0.8% (0.5% y/y) following a 0.5% rise. Motor vehicle & parts production gained 0.9% (5.0% y/y). In the nondurable goods area, clothing output declined 0.5% (-5.1% y/y), but chemical production rose 0.7% (-1.9% y/y). Paper output improved 0.7% (-1.9% y/y). In the capital goods sector, production increased 0.2% (-0.2% y/y) after two slight monthly declines. Transit equipment production fell 0.2% (-3.3% y/y), but information processing equipment increased 1.1% (6.4% y/y). Construction supplies production gained 0.6% (-0.5% y/y).

In the materials sector, a 0.2% output increase (-1.7% y/y) reflected a 0.7% rise (-0.8% y/y) in durables and a 0.3% decline (-0.5% y/y) in nondurables.

Utilities output fell 2.6% (-0.1% y/y) but mining output increased 2.1% (-7.0% y/y).

In the special industrial output groupings, computers, communications equipment & semiconductor output rose 1.0% (6.7% y/y). Computer & peripheral equipment output gained 3.3% (13.0% y/y) but communications equipment output fell 0.4% (+17.4% y/y). Overall factory sector production excluding both the high-tech and automotive sectors rose 0.1% (-0.6% y/y) following a 0.2% rise.

Capacity utilization eased to 75.3%. It has been moving sideways this year following a decline from the 2014 peak of 78.9%. Factory sector utilization also rose to 74.9%, but remained below the 2014 peak of 76.3%.

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 2015 2014 2013
Total Output 0.0 -0.2 -0.1 -0.9 0.3 2.9 1.9
Manufacturing 0.2 0.2 -0.5 -0.2 0.8 1.3 0.9
    Consumer Goods -0.2 -0.1 0.0 0.5 1.4 0.7 0.7
    Business Equipment 0.2 -0.1 -0.4 -0.2 0.7 2.4 -0.2
    Construction Supplies 0.6 0.5 -1.2 -0.5 1.5 3.7 3.0
  Materials 0.2 -0.6 0.0 -1.7 0.5 4.7 3.3
Utilities -2.6 -3.0 2.8 -0.1 -0.7 1.3 2.3
Mining 2.1 -0.4 0.0 -7.0 -1.8 11.0 6.5
Capacity Utilization (%) 75.3 75.4 75.6 76.3 76.7 78.2 76.9
 Manufacturing 74.9 74.8 74.7 75.6 75.5 75.4 74.5
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