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Economy in Brief

U.S. Industrial Production Rebounds
by Gerald D. Cohen  December 14, 2018

Industrial production jumped a greater-than-expected 0.6% (3.9% year-on-year) during November following a downwardly revised 0.2% decline in October (was +0.1%). The 0.1% gain in September output was revised from 0.2%. The Action Economics Survey forecast 0.3% growth in November. Manufacturing activity was unchanged (1.9% y/y) during November, while the two prior months were revised lower. Utilities output generated 3.3% (4.4% y/y) while mining production fired up 1.7% (13.2% y/y).

The flat reading in manufacturing belied offsets between durable goods (+0.2%; 3.7% y/y) and nondurables (-0.2%; +0.7% y/y). Durable goods production was bolstered by gains in machinery (0.5%; 6.2% y/y), motor vehicles (0.3%; 3.5% y/y), and computer output (0.2%; 5.1% y/y). Meanwhile, aerospace edged down 0.1% (+2.8% y/y). In the nondurable sector the 0.6% (+2.0% y/y) growth in chemical production was more than counterbalanced by declines in food (-0.5%; +1.1% y/y), petroleum and coal (-1.7%; -2.5% y/y), as well as printing (-1.0%; -1.7% y/y).

By market group, consumer goods output edged up 0.1% (1.5% y/y) in November. Meanwhile, business equipment declined 0.2% (+4.1% y/y) after strong gains in the previous three months. Construction supplies weakened 0.2% (+1.3% y/y), the third consecutive monthly decline. Production of materials jumped 1.2% (+6.1% y/y) as energy materials sizzled 2.3% (11.6% y/y).

In the special aggregate groupings, production of high technology products rebounded 1.6% (7.6% y/y) after two monthly declines. This was the result of strong gains in semiconductor & electronic components (2.1%; 10.1% y/y) and computer & office equipment (2.8%; 4.4 y/y). Factory sector production excluding the motor vehicle and high tech sectors edged down 0.1% (+1.6% y/y).

Capacity utilization increased to 78.5% in November, in line with the expectations from Action Economics Survey. Factory sector use edged down to 75.7%. Mining rebounded to 94.1%, near September’s business cycle high of 94.2%. Growth in capacity in the manufacturing sector continues to accelerate, up a cyclical high 1.3% y/y in November.

Industrial production and capacity data are included in Haver's USECON database, with additional detail in the IP database. The expectations figures come from the AS1REPNA database.

Industrial Production (SA, % Change) Nov Oct Sep Nov Y/Y 2017 2016 2015
Total Output 0.6 -0.2 0.1 3.9 1.6 -2.0 -1.0
Manufacturing 0.0 -0.1 0.2 1.9 1.2 -0.8 -0.6
    Consumer Goods 0.1 0.0 0.2 1.5 0.0 0.7 1.5
    Business Equipment -0.2 0.6 1.1 4.1 3.2 -5.3 -2.0
    Construction Supplies -0.2 -0.3 -0.6 1.3 2.5 0.9 0.6
  Materials 1.2 -0.4 0.0 6.1 2.0 -3.0 -1.5
Utilities 3.3 0.2 -1.2 4.4 -1.3 -0.4 -0.8
Mining 1.7 -0.7 0.6 13.2 6.4 -9.7 -3.4
Capacity Utilization (%) 78.5 78.1 78.4 77.1 76.1 75.4 77.3
 Manufacturing 75.7 75.8 76.0 75.3 74.8 74.6 75.8
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