2016 Economic Calendar
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Industrial Production  
Released On 8/16/2016 9:15:00 AM For Jul, 2016
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change0.6 %0.4 %0.3 %0.1 % to 0.8 %0.7 %
Manufacturing - M/M0.4 %0.3 %0.2 %0.1 % to 0.4 %0.5 %
Capacity Utilization Rate - Level75.4 %75.5 %75.4 % to 75.8 %75.9 %

Strength in manufacturing leads a strong industrial production report where the July headline jumped 0.7 percent to give a big 1/2 point lift to the capacity utilization rate which is at 75.9 percent.

Manufacturing output rose 0.5 percent in the month which follows a downward revised but still very respectable 0.3 percent gain in June. Vehicle production was exceptionally strong in June and was also very solid in July though other manufacturing industries were also strong contributors to the latest month's gain. Hi-tech was strong in the month and a look at market groups shows 0.6 percent monthly gains for both consumer goods and business goods, the latter a plus given the persistent weakness in business investment.

Outside of manufacturing, utility production jumped 2.1 percent for a second straight month reflecting what has been a strong cooling season. Mining also was a positive contributor, up 0.7 percent in the month though year-on-year output here is still down in the double digits, at minus 10.2 percent.

Though these results are very positive and point to a strong factory contribution to the ongoing economy, weakness in separate data on factory orders unfortunately is not pointing to further gains ahead for manufacturing production.

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

Consensus Outlook
Industrial production is expected to rise 0.3 percent in August and add to July's utility-inflated rise of 0.6 percent. Manufacturing is expected to show less strength, up only 0.2 percent but following a very solid 0.4 percent rise in June. Vehicle production has been making for recent swings in the manufacturing reading and may again during the retooling of July. Capacity utilization is expected to rise 1 tenth to 75.5 percent.

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
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
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

2016 Release Schedule
Released On: 1/152/173/164/155/176/157/158/169/1510/1711/1612/14
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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