2015 Economic Calendar
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Industrial Production  
Released On 11/17/2015 9:15:00 AM For Oct, 2015
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change-0.2 %0.1 %-0.4 % to 0.4 %-0.2 %
Manufacturing - M/M-0.1 %0.3 %-0.1 % to 0.5 %0.4 %
Capacity Utilization Rate - Level77.5 %77.7 %77.5 %77.3 % to 77.8 %77.5 %

Highlights
In a deceptive headline, industrial production fell 0.2 percent in October but weakness is in utilities and mining. Boosted by construction supplies, manufacturing, which is the core component in this report, rose a very solid and higher-than-expected 0.4 percent to end two prior months of decline.

Construction supplies jumped 1.7 percent in the month in a reminder of how strong construction spending is right now. Motor vehicle production, a center of strength all year for the manufacturing sector, jumped 0.7 percent with the year-on-year rate in the double-digits at plus 10.9 percent. High-tech industries, where production has been flat all year, also rose 0.7 percent in the month. Spending this year on capital goods, held down by weak foreign demand, has also been flat, though production of business equipment did rise a respectable 0.2 percent in the month. Production of consumer goods slipped 0.1 percent though the year-on-year rate is a respectable plus 3.5 percent.

Utility output, reflecting the nation's unseasonably warm weather, was really down October, falling 2.5 percent. Year-on-year output is down 1.5 percent. Mining output, the report's third main component after manufacturing and utilities, fell 1.5 percent. This component, down a year-on-year 6.9 percent, has been getting hit by weak commodity prices.

Turning to capacity readings, total utilization came in at 77.5 percent which is unchanged from September's initial reading but down 2 tenths from September's revised reading. Capacity utilization in the manufacturing sector rose 2 tenths to 76.4 percent.

It's not been easy to find good news out of the manufacturing sector which makes this report a standout of sorts. Gains in production, however, would have to extend through year-end to turnaround what has been a weak, export-hit year for the manufacturing sector.

Consensus Outlook
Industrial production has been on a two-month decline but is expected to edge 0.1 percent higher in October. The manufacturing component, which has contracted in four of the last five reports, is expected to rise 0.3 percent in line with a gain in manufacturing hours. Vehicle production has been showing the most strength in this report, offsetting weakness in business equipment and underscoring that demand right now is domestically based.

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
 
 

2015 Release Schedule
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