2017 Economic Calendar
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Industrial Production  
Released On 5/16/2017 9:15:00 AM For Apr, 2017
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change0.5 %0.4 %0.4 %0.2 % to 1.1 %1.0 %
Manufacturing - M/M-0.4 %0.3 %0.2 % to 0.6 %1.0 %
Capacity Utilization Rate - Level76.1 %76.3 %75.9 % to 76.4 %76.7 %

The manufacturing sector did in fact surge during April, to more than reverse contraction in March. Industrial production rose a stronger-than-expected 1.0 percent with the manufacturing component, after falling 0.4 percent in March, also up 1.0 percent. These are the strongest monthly gains for both of these readings since February 2014.

Gains are spread throughout the manufacturing sector led by motor vehicles where volumes surged 5.0 percent in the month. And business equipment, in a positive indication for second-quarter business investment, rose a very sharp 1.2 percent. Production of consumer goods was even stronger, up 1.5 percent. Two negatives are hi-tech industries with a small decline and also construction supplies which posted a second straight dip that offers a reminder of this morning's disappointing housing starts report.

Turning back to positives, mining is a major strength of April's report, up 1.2 percent to more than reverse March's 0.4 percent decline. Utility output is another positive, up 0.7 percent on top of March's weather-related 8.2 percent record surge.

April is proving an uneven month for economic data, led on the positive side by this report and the monthly employment report but offset by weakness in retail sales, housing starts, and consumer inflation. But for manufacturing, today's news is very positive and helps vindicate what has been a long run of very strong signals from regional reports including the Philly Fed. Last year was dead flat for manufacturing but this year, especially after this report, looks for now to be solidly positive. Watch for May's Philly Fed report on Thursday.

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

Consensus Outlook
Manufacturing production is expected to bounce back from March's 0.4 percent decline with a consensus gain of 0.3 percent. Heavy weather was behind March's manufacturing drop and also March's record 8.6 percent monthly surge in utility output which lifted overall industrial production to a 0.5 percent gain. The consensus for the overall rate in April is 0.4 percent with the capacity utilization consensus at 76.3 percent vs March's 76.1 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

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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