2017 Economic Calendar
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Industrial Production  
Released On 2/15/2017 9:15:00 AM For Jan, 2017
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change0.8 %0.6 %0.0 %-0.6 % to 0.2 %-0.3 %
Manufacturing - M/M0.2 %0.2 %-0.1 % to 0.4 %0.2 %
Capacity Utilization Rate - Level75.5 %75.6 %75.5 %75.0 % to 75.6 %75.3 %

Highlights
A swing in utility output skewed what is, however, no better than a modest industrial production report for January. Industrial production, reflecting a 5.7 percent weather-related drop for utilities, fell 0.3 percent which is below Econoday's no-change consensus.

But the real disappointment in the report is the manufacturing component which could muster no better than a consensus gain of 0.2 percent. This reading hasn't been able to build any momentum to speak of and was held down in January by a sharp 2.9 percent monthly downswing in vehicles. Excluding motor vehicles, manufacturing volumes rose 0.5 percent which is really the highlight of today's report. Also a highlight though is mining which is the report's third and smallest component. Mining continues to show new life with a very sharp 2.8 percent jump in January.

Overall capacity utilization reflects the general softness of the industrial sector, at 75.3 percent for a 3 tenths decline in the month and 4.6 percentage points below its long run average. Manufacturing utilization is likewise soft at 75.1 percent.

The industrial economy, held down by weak global demand, has been running below average the past 2-1/2 years, when energy prices first collapsed in mid-2014. But advance indicators, including this morning's Empire State report, are almost uniformly pointing to a rebound ahead, a rebound however that has yet to appear in the government's definitive data.

Recent History Of This Indicator
Putting big utility swings aside and focusing on manufacturing, the industrial production report has not been showing much strength. The manufacturing component, despite solid gains for auto production, has been struggling to stay in positive ground, coming in at only plus 0.2 percent in December following a 0.1 percent decline in November. Weakness here in part reflects weakness in exports. Forecasters see manufacturing doing no better than repeating December's 0.2 percent performance with overall production unchanged. The capacity utilization rate is expected to hold at December's 75.5 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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