Global| Jul 16 2002Industrial Production Strong
by:Tom Moeller
|in:Economy in Brief
Summary
Industrial production rose more than expected last month, up twice the Consensus expectation for a 0.4% rise. May's gain was revised slightly higher. Factory sector output rose 0.8% (2.7% YTD) following a 0.6% May gain that was [...]
Industrial production rose more than expected last month, up twice the Consensus expectation for a 0.4% rise. May's gain was revised slightly higher. Factory sector output rose 0.8% (2.7% YTD) following a 0.6% May gain that was revised up.
Higher output of motor vehicles and parts, up 2.5%, led the June output gain. High tech output also was strong, up 1.7% (13.7% YTD). Excluding high tech, factory output rose 0.7% (2.5% YTD), the sixth monthly gain this year.
Output of consumer goods rose a strong 0.8% following the weak 0.1% May gain. Output of home electronics rose 0.3% following a 4.2% gain in May. Output of appliances and furniture retreated 2.9% following the 2.6% May surge. Nondurable output rose moderately following two months of decline.
Output of business equipment rose modestly for the second month in a row. Gains have been restrained all year by falling output of transportation equipment.
Capacity utilization rose for the sixth month this year, but remained down sharply from the late 1990s.
| Production & Capacity | June | May | Y/Y | 2001 | 2000 | 1999 |
|---|---|---|---|---|---|---|
| Industrial Production | 0.8% | 0.4% | 0.2% | -3.7% | 4.5% | 3.7% |
| Capacity Utilization | 76.1% | 75.6% | 76.7%(6/01) | 76.8% | 81.8% | 81.4% |
by Tom Moeller July 16, 2002
Chain store sales fell 0.3% following a 0.7% surge the week prior according to the BTM-UBSW survey.
Early-July sales were 0.2% above the June average.
The leading indicator of chain store sales published by BTM rose in early July and began the month slightly ahead of the June average.
During the last five years there has been a 61% correlation between the year-to-year percent change in monthly chain store sales and the change in sales of general merchandise, apparel and furniture.
| BTM-UBSW (SA, 1977=100) | 7/13/02 | 7/6/02 | Y/Y | 2001 | 2000 | 1999 |
|---|---|---|---|---|---|---|
| Total Weekly Retail Chain Store Sales | 414.4 | 415.6 | 3.5% | 2.1% | 3.4% | 6.7% |
by Tom Moeller July 16, 2002
"... the fundamentals are in place for a return to sustained healthy growth: Imbalances in inventories and capital goods appear largely to have been worked off; inflation is quite low and is expected to remain so; and productivity growth has been remarkably strong, implying considerable underlying support to household and business spending as well as potential relief from cost and price pressures. In considering policy actions this year, the Federal Open Market Committee has recognized that the accommodative stance of policy adopted last year in response to the substantial forces restraining the economy likely will not prove compatible over time with maximum sustainable growth and price stability. But, with inflation currently contained and with few signs that upward pressures are likely to develop any time soon, we have chosen to maintain that stance pending evidence that the forces inhibiting economic growth are dissipating enough to allow the strong fundamentals to show through more fully."
The complete text of the Chairman's latest report can be viewed at: http://www.federalreserve.gov/boarddocs/hh/2002/july/testimony.htm
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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