Global| Feb 15 2019U.S. Industrial Production Declines Broadly
by:Tom Moeller
|in:Economy in Brief
Summary
Activity in the factory sector weakened significantly last month. Industrial production declined 0.6% (+3.8% y/y) during January following a 0.1% December uptick, revised from +0.3%. A 0.2% rise had been expected in the Action [...]
Activity in the factory sector weakened significantly last month. Industrial production declined 0.6% (+3.8% y/y) during January following a 0.1% December uptick, revised from +0.3%. A 0.2% rise had been expected in the Action Economics Forecast Survey.
Manufacturing production declined 0.9% (+2.8% y/y) and reversed the December increase. Consumer goods output fell 0.7% (+0.1% y/y), extending the prior month's 0.9% decline. Auto production cratered 8.0% (-0.5% y/y) and reversed two months of strong increase. Appliance & furniture output fell 0.9% (-0.1% y/y) after a 0.6% decline. Working higher, output of computers, video & audio equipment jumped 1.6% (15.8% y/y) following three straight months of strong gain. In the nondurable goods sector, apparel production fell 1.0% (-7.8% y/y), extending a series of large monthly declines. Chemical product production eased 0.1% (+1.2% y/y) but output of paper products rose 0.9% (-4.1% y/y). Production of business equipment fell 1.5% (+3.8% y/y), reversing three straight months of increase. The decline was led by a 5.3% drop (+3.2% y/y) in transit equipment production. Information processing equipment fell 1.8% (+3.0% y/y), reversing the December rise.
Production of construction supplies fell 0.4% (+5.3% y/y) after a 2.0% rise. Materials production declined 0.4% (+6.2 y/y) and reversed the December increase.
Output of selected high-technology products nudged 0.1% higher (6.5% y/y) following three consecutive months of increase. Computer & office equipment production strengthened 1.2% (-3.9 y/y), but communications equipment production held steady (+17.4% y/y). Semiconductor & related product production eased 0.1% (+7.4% y/y).
Excluding the motor vehicle sector, factory output eased 0.2% last month (+3.1% y/y) following a 0.5% rise.
Capacity utilization fell to 78.2% with the lower level of output. It was the weakest utilization rate in six months. Factory sector utilization declined to a three-month low of 75.8%. Factory sector capacity increased 1.4% y/y and sustained the recent increased rate of gain versus its decline in 2015.
Industrial production and capacity data and US Population-Weighted Heating and Cooling Days are included in Haver's USECON database. Additional detail on production and capacity can be found in the IP database. The expectations figures come from the AS1REPNA database.
| Industrial Production (SA, % Change) | Jan | Dec | Nov | Jan Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Total Output | -0.6 | 0.1 | 0.6 | 3.8 | 4.0 | 1.6 | -2.0 |
| Manufacturing | -0.9 | 0.8 | 0.3 | 2.8 | 2.4 | 1.2 | -0.8 |
| Consumer Goods | -0.7 | -0.9 | 0.3 | 0.1 | 2.3 | 0.0 | 0.7 |
| Business Equipment | -1.5 | 1.0 | 0.3 | 3.8 | 3.1 | 3.2 | -5.3 |
| Construction Supplies | -0.4 | 2.0 | 0.6 | 5.3 | 3.3 | 2.5 | 0.9 |
| Materials | -0.4 | 0.3 | 1.1 | 6.2 | 5.9 | 2.0 | -3.0 |
| Utilities | 0.4 | -6.9 | 2.2 | -5.5 | 4.1 | -1.3 | -0.4 |
| Mining | 0.1 | 1.5 | 1.1 | 15.3 | 12.5 | 6.4 | -9.7 |
| Capacity Utilization (%) | 78.2 | 78.8 | 78.9 | 77.0 | 78.0 | 76.1 | 75.4 |
| Manufacturing | 75.8 | 76.5 | 76.0 | 74.7 | 75.7 | 74.8 | 74.6 |
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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