2012 Economic Calendar
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Industrial Production
Released On 10/16/2012 9:15:00 AM For Sep, 2012
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change-1.2 %-1.4 %0.2 %0.0 % to 1.0 %0.4 %
Capacity Utilization Rate - Level78.2 %78.0 %78.3 %78.0 % to 79.2 %78.3 %
Manufacturing - M/M-0.7 %-0.9 %0.1 %-0.3 % to 0.5 %0.2 %

Highlights
Manufacturing made a partial comeback in September. But it does not appear to be related to underlying fundamentals-more to hurricane related swings. Overall industrial production rebounded 0.4 percent in September after falling 1.4 percent in August (originally down 1.2 percent). Market expectations were for a 0.2 percent rise. However, according to the Fed, roughly 0.3 percentage points of the decline in overall industrial production in August reflected the effect of precautionary idling of production in late August along the Gulf of Mexico in anticipation of Hurricane Isaac, and part of the rise in September was a result of the subsequent resumption of activity at idled facilities.

By major components, manufacturing rose 0.2 percent, following a drop of 0.9 percent in August (previously estimated at down 0.7 percent). Expectations were for a 0.1 percent improvement for the manufacturing component.

Motor vehicles production dipped 2.5 percent, following a 5.1 percent decrease in August. Manufacturing excluding motor vehicles rebounded 0.4 percent after a 0.6 percent decline the month before.

In September, mining output rebounded 0.9 percent after dropping 1.6 percent in August. Utilities output made a partial comeback of 1.5 percent, following a fall of 4.3 percent the prior month. Again, a significant part of the swings were hurricane related.

Overall capacity utilization rose to 78.3 percent from 78.0 percent in August. The consensus called for 78.3 percent.

The bottom line is that manufacturing is now sluggish and not providing the engine of growth as earlier in the recovery.

The traditional non-NAICS numbers for industrial production may differ marginally from the NAICS basis figures.

Market Consensus before announcement
Industrial production fell 1.2 percent, following a 0.5 percent jump in July. By major components, manufacturing declined 0.7 percent, following an increase of 0.4 percent in July. Motor vehicles production tugged down on manufacturing, decreasing 4.0 percent in August, following a 2.7 percent rebound in July. But other components were soft as manufacturing excluding motor vehicles dipped 0.4 percent, following a 0.2 percent gain the prior month. In August, mining output fell 1.8 percent after a 1.0 percent gain in July. The August drop was partially tied to hurricane related shutdowns in the oil industry. Utilities output decreased 3.6 percent after a 1.3 percent gain in July. Overall capacity utilization slipped to 78.2 percent from 79.2 percent in July. For the September report the manufacturing component of industrial production is likely to be weak again as production worker hours in manufacturing declined 0.4 percent.

Definition
The Federal Reserve's monthly index of industrial production and the related capacity indexes and capacity utilization rates cover manufacturing, mining, and electric and gas utilities. The industrial sector, together with construction, accounts for the bulk of the variation in national output over the course of the business cycle. The production index measures real output and is expressed as a percentage of real output in a base year, currently 2007. The capacity index, which is an estimate of sustainable potential output, is also expressed as a percentage of actual output in 2007. The rate of capacity utilization equals the seasonally adjusted output index expressed as a percentage of the related capacity index.  Why Investors Care
 
[Chart]
The industrial sector accounts for less than 20 percent of GDP. Yet, it creates much of the cyclical variability in the economy.
Data Source: Haver Analytics
 
[Chart]
The capacity utilization rate reflects the limits to operating the nation's factories, mines and utilities. In the past, supply bottlenecks created inflationary pressures as the utilization rate hit 84 to 85 percent.
Data Source: Haver Analytics
 

 

2012 Release Schedule
Released On: 1/182/153/164/175/166/157/178/159/1410/1611/1612/14
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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