2017 Economic Calendar
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Industrial Production  
Released On 1/18/2017 9:15:00 AM For Dec, 2016
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change-0.4 %-0.7 %0.6 %0.4 % to 1.1 %0.8 %
Manufacturing - M/M-0.1 %0.3 %0.2 % to 0.5 %0.2 %
Capacity Utilization Rate - Level75.0 %74.9 %75.4 %75.2 % to 76.1 %75.5 %

Highlights
A weather-boosted 6.6 percent surge in utility output fed an outsized 0.8 percent gain in industrial production for December, one that follows however a downward revised and very sharp 0.7 percent decline in November. The monthly surge for utilities is the greatest since December 1989.

The big story in this report, however, is another soft reading for manufacturing production where volumes rose only 0.2 percent in the month. And if it wasn't for a sharp 1.8 percent gain in the vehicle subcomponent, manufacturing would have shown no change at all.

Mining, which together with utilities and manufacturing, is a main component of the report, and production here was unchanged. Year-on-year rates show mining still at the rear at minus 2.8 percent with utilities at plus 6.2 and manufacturing no better than December's monthly rate, only 0.2 percent higher.

Overall capacity utilization rose a sizable 6 tenths to 75.5 percent with the manufacturing component, however, up only 1 tenth to a still subdued 74.8 percent rate in a reminder that excess capacity holds down goods inflation.

The factory sector, hit by weakness in exports and also energy equipment, struggled through 2016 and apparently could not manage a solid year-end rally. But yesterday's Empire State did offer a positive advance look on January's conditions with the next advance look on Thursday from the Philly Fed.

Recent History Of This Indicator
The manufacturing component of the industrial production report fell back noticeably in November, down 0.1 percent with weakness spread evenly through the report. Utility output, pulled lower by warmer-than-usual temperatures, fell for a third straight month, though mining extended its rebound with a second straight strong gain. Forecasters see a bounce for manufacturing where the December call is for a 0.3 percent gain. The industrial production headline is expected to rise 0.6 percent after dropping 0.4 percent in November with capacity utilization see at 75.4 percent which would be well up from November's 75.0 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 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
 
 

2017 Release Schedule
Released On: 1/182/153/174/185/166/157/148/179/1510/1711/1612/15
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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