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Economy in Brief
U.S. Energy Prices Rise Further
Retail gasoline prices increased to $4.59 per gallon in the week ended May 23...
S&P Flash PMIs Are Mixed in May As Manufacturing Erodes Slowly
Among the early reporting countries in Europe and Japan, the S&P PMI readings for May tilt toward weakness...
NABE Lowers Growth Expectations for Next Year & 2022
The NABE expects the economic expansion to continue through its third year...
Chicago Fed National Activity Index Improves in April
The Chicago Fed National Activity Index (CFNAI) rose to 0.47 during April...
IFO Registers Small Rebound on the Month
Germany's IFO index has rebounded on the month...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits & Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
| · Industrial production fell by 0.2% in March as utilities output pulled back but manufacturing output advanced by a strong 0.7% led by a gain of 0.9% in durable goods output. March saw a decline in consumer goods output, materials production was flat and there was a rise of 0.8% in business equipment output. · But for the quarter as a whole and on trend, industrial production is a story of firming consumer output offset by plunging demand for equipment on the part of business with materials output vacillating about unchanged. Manufacturing output rose by 1.5% in Q1 given the strong productivity there that was not enough to create job growth in the sector. · Looking at the just completed quarter we find industrial production is higher for most measures. So the National ISM report is correct to be above 50. There is a great deal of regional disparity according to various regional manufacturing surveys. We see that in the variety of conditions across industry groups there is a great deal of variation as well. Consumer durables output in the quarter rose at a 0.1% pace as auto output fell. Consumer nondurable output rose by a robust 6% pace with energy output up at a 12% pace. Business equipment output fell in the quarter but computer and office equipment production rose by 34.3%. Materials output was mixed, up by 0.5% in the quarter but up by 1.9% for durable goods and off by 1.7% for nonenergy nondurable goods. Overall auto production fell by 0.1% in Q1 but truck production expanded at a 52% annual rate. |
|---|
| Monthly Percent Changes | At Annual Rates of Change | SAAR | |||||
| Month-to-month Percent Change | 3-Month | 6-Month | Year/Year | 07-Q1 | |||
| Industrial Output | Mar-07 | Feb-07 | Jan-07 | %Change | %Change | %Change | Pct Change |
| All Prod & Materials | -0.2% | 0.8% | -0.4% | 1.1% | 0.5% | 2.3% | 1.6% |
| All Products | -0.3% | 1.0% | -0.4% | 1.1% | 1.2% | 2.5% | 2.0% |
| Final Products | -0.3% | 1.2% | -0.5% | 1.4% | 2.3% | 3.4% | 3.1% |
| Manufacturing only | -- | -- | -- | -- | -- | -- | -- |
| MFG - NAICS | 0.7% | 0.1% | -0.6% | 0.7% | 0.5% | 2.7% | 1.5% |
| MFG - Durables | 0.8% | 0.2% | -1.1% | -0.3% | 0.7% | 3.5% | 0.4% |
| MFG - Nondurables | 0.5% | 0.0% | 0.0% | 1.9% | 0.2% | 1.9% | 3.0% |
| Consumer Goods | -0.6% | 1.7% | 0.0% | 4.1% | 2.4% | 2.1% | 4.5% |
| Durables | 0.6% | 1.7% | -2.9% | -2.6% | 0.2% | -1.2% | 0.1% |
| Automotive Production | 0.4% | 3.7% | -5.4% | -6.0% | 1.4% | -3.1% | -0.4% |
| Excl Automotive Production | 0.7% | 0.0% | -0.6% | 0.5% | -0.9% | 0.6% | 0.6% |
| Nondurables | -1.0% | 1.6% | 1.0% | 6.3% | 3.1% | 3.2% | 6.0% |
| Nonenergy | 0.6% | 0.5% | -0.1% | 4.0% | 4.8% | 3.9% | 4.3% |
| Consumption Energy | -6.1% | 5.4% | 4.5% | 13.5% | -2.2% | 0.7% | 12.1% |
| Business Equip. | 0.8% | 0.3% | -2.2% | -4.5% | 3.3% | 7.4% | -0.6% |
| Transportation | 0.2% | -0.1% | -1.4% | -5.2% | 6.0% | 7.6% | 0.3% |
| Computer & Office Equipment | 3.5% | 3.3% | 2.4% | 38.2% | 30.6% | 28.3% | 34.4% |
| Excl Technology & Transportation | 0.8% | -0.2% | -2.2% | -6.4% | 2.3% | 6.7% | -2.0% |
| Materials | 0.0% | 0.5% | -0.4% | 0.7% | -0.5% | 2.1% | 0.5% |
| Durables | 1.0% | -0.2% | 0.1% | 3.5% | -0.2% | 3.6% | 1.9% |
| Nondurables excl energy | 0.6% | 0.1% | -1.2% | -2.3% | -1.7% | 0.3% | -1.7% |
| Energy | -2.2% | 2.3% | -0.1% | -0.4% | 0.2% | 1.6% | 0.7% |
by Robert Brusca April 17, 2007
The chart on the left shows the trends for output by main manufacturing sector. As consumer output has steadied and strengthened, the business sector has been unraveling. This is an unpleasant picture and has been quite unexpected. We still do not know what is holding business back.
