Global| Feb 15 2019U.S. Industrial Production Slips Unexpectedly
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve reported that industrial production eased 0.1% (+3.5% y/y) during May following a 0.9% April rise, revised from 0.7%. A 0.2% increase had been expected in the Action Economics Forecast Survey. Factory sector [...]
The Federal Reserve reported that industrial production eased 0.1% (+3.5% y/y) during May following a 0.9% April rise, revised from 0.7%. A 0.2% increase had been expected in the Action Economics Forecast Survey. Factory sector production declined 0.7% (+1.7% y/y) and reversed April's 0.6% gain, revised from 0.5%. Utility output strengthened 1.1% (4.0% y/y) after a 3.2% increase. Mining production improved 1.8% (12.5% y/y) following a 1.0% improvement.
The surprising decline in production partially reflected a 1.0% fall (+1.5% y/y) in consumer goods output which reversed the prior month's increase. Durable consumer goods production declined 3.0% (0.0% y/y) after a 0.8% fall. Automotive product output declined 5.5% (-1.5% y/y) following a 1.9% shortfall. Computer, video & related production improved 0.8% (4.7% y/y) after a 0.1% uptick. Appliance, furniture & carpeting production fell 1.2% (-1.5% y/y) and countered the prior month's 1.7% rise. Nondurable consumer goods production fell 0.4% (+1.9% y/y) following a 1.5% gain. Energy product output weakened 1.6% (-0.2% y/y) after a 3.7% increase. Apparel production declined 1.9% (0.0% y/y) after a 2.4% gain. Paper product output weakened 1.1% (-2.2% y/y) after a 0.8% increase. Food & tobacco production fell 0.3% (3.1% y/y) following a 1.1% improvement. Working the other way, chemical product production rose 0.5% (2.8% y/y) after a 0.4% gain.
Production of business equipment declined 1.1% last month (+1.0% y/y) and reversed April's 1.1% rise. Transit equipment production fell 3.5% (-2.9% y/y) following a 0.3% dip. Production of information processing equipment slipped 0.1% (+4.8% y/y) following four straight months of strong increase. Industrial equipment & other equipment production fell 0.4% (+1.4% y/y) after a 1.8% rise.
Construction supplies output notched 0.1% higher (3.6% y/y) after a 0.5% increase.
Production of materials improved 0.5% (5.5% y/y) after a 0.9% increase. Energy product materials output increased 2.0% (11.0% y/y) after two months of roughly 1.2% gain. Durable goods materials output fell 0.8% (+2.7% y/y) following a 0.5% rise and nondurable goods materials held steady (0.9% y/y) following a 0.9% gain.
In the special aggregate groupings, production of selected high-technology industries rose 0.2% (6.3% y/y) following a 1.8% jump. Nonenergy production excluding high-tech retreated 0.6% (+1.7% y/y) and reversed a 0.6% rise. Factory sector production excluding both high-tech and autos eased 0.2% (+1.9% y/y) after a 0.8% strengthening.
Capacity utilization eased to 77.9% from its three-year high of 78.1%. Factory sector capacity utilization declined to 75.3%, the lowest level since January. Manufacturing sector capacity increased 1.0% y/y.
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) | May | Apr | Mar | May Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Total Output | -0.1 | 0.9 | 0.5 | 3.5 | 1.6 | -2.0 | -1.0 |
| Manufacturing | -0.7 | 0.6 | -0.1 | 1.7 | 1.2 | -0.8 | 0.1 |
| Consumer Goods | -1.0 | 1.0 | 0.4 | 1.5 | 0.0 | 0.7 | 1.5 |
| Business Equipment | -1.1 | 1.1 | 0.1 | 1.0 | 3.2 | -5.3 | -2.0 |
| Construction Supplies | 0.1 | 0.5 | -1.0 | 3.6 | 2.5 | 0.9 | 0.6 |
| Materials | 0.5 | 0.9 | 0.8 | 5.5 | 2.0 | -3.0 | -1.5 |
| Utilities | 1.1 | 3.2 | 4.1 | 4.0 | -1.3 | -0.4 | -0.8 |
| Mining | 1.8 | 1.0 | 1.4 | 12.5 | 6.4 | -9.7 | -3.4 |
| Capacity Utilization (%) | 77.9 | 78.1 | 77.5 | 76.2 | 78.1 | 75.4 | 77.3 |
| Manufacturing | 75.3 | 75.9 | 75.5 | 74.8 | 74.8 | 74.6 | 75.8 |
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.
