U.S. Industrial Production Stalls in February
by:Tom Moeller
|in:Economy in Brief
Summary
- Production weakness is broad-based amongst market groups.
- Capacity utilization is unchanged.
Total industrial production showed no increase during February (-0.2% y/y) following a 0.3% January rise, revised from no change, and a 1.4% December decline, revised from a 1.0% weakening, according to the Federal Reserve Board. A 0.4% increase had been expected in the Action Economics Forecast Survey.
By industry groups, manufacturing production increased 0.1% (-1.0% y/y) in February after strengthening 1.3% in January, revised from 1.0%. Durable goods output edged 0.1% higher (-0.5% y/y) after increasing 0.7% in January. Computer & electronic product production rose 1.2% (-6.0% y/y) after falling 1.7%. Electrical equipment & appliance production gained 0.9% (-1.6% y/y). Furniture production rose 0.3% (-10.9% y/y) but primary metals output held steady (-5.9% y/y). Machinery production weakened 0.4% (-1.9% y/y) after it rose 2.9% in January while motor vehicle & parts production fell 0.3% (+10.8% y/y).
Nondurable goods production increased 0.2% (-1.3% y/y) in February after rising 2.1% in January, reflecting a 0.8% decline (+10.8% y/y) in apparel & leather goods output. Textiles & product mills production weakened 2.1% (-12.2% y/y) and paper product production fell 0.9% (-11.2% y/y). Petroleum & coal production fell 0.4% (+1.3% y/y). To the upside, food, beverages & tobacco output edged 0.1% higher (-1.3 y/y) and chemicals production surged 1.2% (1.7% y/y). Production for printing & related support activities rose 0.5% (-1.5% y/y).
Utilities output increased 0.5% (-7.6% y/y) after declining 10.1% in January with warm temperatures. Meanwhile, mining activity fell 0.6 (+7.1% y/y) in February after rising 2.0% in January.
By market groups, consumer goods output edged 0.1% higher (-0.9% y/y) in February following three consecutive monthly declines. Nondurable consumer goods production rose 0.3% (-1.3% y/y) while durable consumer goods declined 0.5% (+0.6% y/y) with weakness in the auto sector. Business equipment output eased 0.2% (+1.4% y/y) in February following three consecutive m/m declines. Construction supplies production fell 0.5% (-2.6% y/y) while materials production edged 0.1% higher (0.3% y/y).
Amongst special classifications, factory output of selected high-tech industries declined 0.6% (-11.6% y/y) in February, the seventh successive m/m decline. Factory output excluding selected high-tech industries edged 0.1% higher (-0.7% y/y) and manufacturing production excluding both selected high-tech and motor vehicles & parts also rose 0.1% (-1.5% y/y) following a 1.6% increase.
Capacity utilization held steady m/m at 78.0% in February. A 78.5% rate had been expected. Manufacturing capacity utilization eased to 77.6% in February after rising to 77.7% in January.
Industrial production and capacity are located in Haver's USECON database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the AS1REPNA database.
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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