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Economy in Brief

U.S. Industrial Production Increases Moderately
by Tom Moeller  October 16, 2018

The factory sector remains in good shape. Industrial production rose 0.3% (5.1% y/y) during September following an unrevised 0.4% August increase. A 0.2% improvement had been expected in the Action Economics Survey. Manufacturing activity gained 0.2% (3.5% y/y) last month after a 0.3% August gain, revised from 0.2%. Continuing strong, mining output improved 0.5% (13.4% y/y) after a 0.4% rise. Utilities output held steady (5.4% y/y) in September following a 1.1% surge.

The rise in manufacturing output was led by a 1.7% increase (7.1% y/y) in motor vehicles and parts output after a 4.3% jump in August. Machinery production increased 0.9% (5.2% y/y) following a 1.9% surge. Furniture & related product production gained 0.7% (1.8% y/y) and recouped the prior month's decline. Production of computers & electronic products rose 0.5% (6.7% y/y) following a 0.3% easing.

In the nondurable goods sector, production eased slightly overall as apparel production dropped 1.7% (-1.2% y/y), the fourth sharp decline in the last five months. Chemical production declined 0.4% (+7.8% y/y) after no change, but paper output rose 0.2% (-0.4% y/y) following a 1.2% drop. Petroleum & coal product output rose 0.9% (-0.4% y/y) following a 0.3% gain.

Business equipment production strengthened 0.8% (3.6% y/y) after a 1.0% increase. Transit equipment output jumped 2.2% (3.8% y/y) and doubled the prior month's gain. Industrial & other equipment production rose 0.5% (3.0% y/y) following a 1.0% rise. Information processing equipment production ticked just 0.1% higher (4.8% y/y) following a 0.6% decline.

Finally, construction supplies output fell 0.6% (+2.4% y/y), the third decline in four months. Industrial supplies & materials production held steady (2.0% y/y) after a 0.1% dip.

In the special aggregate groupings, production of high technology products gained 0.6% (6.9% y/y) following a 0.3% rise. A 1.5% surge (19.3% y/y) in semiconductor & electronic component production followed a 0.7% gain. Computer & peripheral production fell, however, by 2.2%, down sharply for the second straight month (+1.1% y/y). Factory sector production excluding the motor vehicle and high tech sectors improved 0.1% (3.1% y/y) and made up July's dip.

Capacity utilization held steady m/m at 78.1%, up from a 75.0% low touched in November 2016. Factory sector utilization inched up to 75.9%, but mining sector utilization held fairly steady at 92.1%.

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.

The Slope of the Yield Curve and the Near-Term Outlook from the Federal Reserve Bank of San Francisco can be found here.

Industrial Production (SA, % Change) Sep Aug Jul Sep Y/Y 2017 2016 2015
Total Output 0.3 0.4 0.3 5.1 1.6 -2.0 -1.0
Manufacturing 0.2 0.3 0.3 3.5 1.2 -0.8 -0.6
    Consumer Goods 0.2 0.4 0.2 2.5 0.0 0.7 1.5
    Business Equipment 0.8 1.0 0.3 3.6 3.2 -5.3 -2.0
    Construction Supplies -0.6 0.3 -0.1 2.4 2.5 0.9 0.6
  Materials 0.2 0.3 0.7 8.0 2.0 -3.0 -1.5
Utilities 0.0 1.1 0.0 5.4 -1.3 -0.4 -0.8
Mining 0.5 0.4 0.8 13.4 6.4 -9.7 -3.4
Capacity Utilization (%) 78.1 78.1 77.9 75.7 76.1 75.4 77.3
 Manufacturing 75.9 75.8 75.7 74.2 74.8 74.6 75.8
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