2014 Economic Calendar
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Industrial Production  
Released On 2/14/2014 9:15:00 AM For Jan, 2014
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change0.3 %0.3 %0.0 % to 0.6 %-0.3 %
Manufacturing - M/M0.4 %0.3 %0.1 %-0.2 % to 0.3 %-0.8 %
Capacity Utilization Rate - Level79.2 %78.9 %79.3 %79.1 % to 79.6 %78.5 %
cap util - level79.209 index level

Highlights
The manufacturing sector is losing traction-weather related or not. Overall industrial production fell 0.3 percent in January, following a 0.3 percent gain the month before. Analysts expected a 0.3 percent rise for the latest month.

Turning to major components, it was worse for manufacturing which dropped 0.8 percent after a 0.3 percent increase in December. The consensus projected a 0.1 percent increase for January. Atypically adverse weather helped the overall number from being weaker as utilities jumped 4.1 percent in January, following a 1.4 percent dip the prior month. Mining slipped 0.9 percent after gaining 1.8 percent.

Looking at detail for manufacturing, durables fell 0.8 percent in January, led down by a 5.0 percent drop in motor vehicles and parts. Nondurables declined 0.8 percent in January.

Manufacturing excluding motor vehicles decreased 0.5 percent in January, following a 0.3 percent rise in December.

Capacity utilization declined to 78.5 percent from 78.9 percent in December.

Today's report adds to the argument that the first quarter will be sluggish. It also calls to attention as to whether the Fed will pause in its "measured steps" for tapering quantitative easing. But the Fed clearly will watch the next employment report before making that decision in mid-March.

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

Consensus Outlook
Industrial production increased 0.3 percent in December after a gain of 1.0 percent in November. The December figure matched expectations for a 0.3 percent rise. Turning to major components, manufacturing posted a 0.4 percent increase, following a jump of 0.6 percent the month before. The December gain in manufacturing was its fifth consecutive increase. Motor vehicles advanced 1.6 percent in December after jumping 3.6 percent in November. Still, manufacturing was healthy outside of this sector. Excluding motor vehicles, manufacturing posted a 0.4 percent boost, following an increase of 0.4 in November. The output of utilities declined 1.4 percent, following a 3.0 percent spike in November. Mining activity expanded 0.8 percent after a 1.9 percent boost in November. Capacity utilization for total industry improved to 79.2 percent from 79.1 percent in November. More recently, production worker hours in manufacturing were down 0.1 percent for the month, indicating a sluggish manufacturing component for January industrial production. But utilities could put the overall number in positive territory.

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 2012. The capacity index, which is an estimate of sustainable potential output, is also expressed as a percentage of actual output in 2012. The rate of capacity utilization equals the seasonally adjusted output index expressed as a percentage of the related capacity index.

The index of industrial production is available nationally by market and industry groupings. The major groupings are comprised of final products (such as consumer goods, business equipment and construction supplies), intermediate products and materials. The industry groupings are manufacturing (further subdivided into durable and nondurable goods), mining and utilities. The capacity utilization rate -- reflecting the resource utilization of the nation's output facilities -- is available for the same market and industry groupings.

Industrial production was also revised to NAICS (North American Industry Classification System) in the early 2000s. Unlike other economic series that lost much historical data prior to 1992, the Federal Reserve Board was able to reconstruct historical data that go back more than 30 years.  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
 
 

2014 Release Schedule
Released On: 1/172/143/174/165/156/167/168/159/1510/1611/1712/15
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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