2017 Economic Calendar
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Industrial Production  
Released On 6/15/2017 9:15:00 AM For May, 2017
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change1.0 %1.1 %0.2 %-0.1 % to 0.5 %0.0 %
Manufacturing - M/M1.0 %1.1 %0.2 %-0.3 % to 0.3 %-0.4 %
Capacity Utilization Rate - Level76.7 %76.8 %76.5 % to 76.9 %76.6 %

Highlights
Forget about all the strength in the low sample-sized regional reports. Government data are not pointing to strength at all as manufacturing readings in the May industrial production report are a matter of concern.

Industrial production could manage no better than an unchanged reading in May while the manufacturing component fell 0.4 percent. Both are lower than expected with manufacturing below Econoday's low estimate.

Vehicle production fell sharply in the month, down 2.0 percent in a reminder that consumer spending on autos has been very weak this year. And in a reminder of how weak capital goods data have been, production of business equipment fell 0.7 percent. Hi-tech goods, in yet further confirmation of trouble, were unchanged in the month.

The mining component is a positive in this report, up 1.6 percent for a second straight strong gain, with the utilities component also positive, at plus 0.4 percent.

But manufacturing makes up the vast bulk of the nation's industrial sector and today's report makes April's strength look very isolated. This report is bad news for durables data yet to be released not to mention factory payrolls.

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

Recent History Of This Indicator
Forecasters are calling for only a 0.2 percent gain in May industrial production in what would be a modest result and far down from April's 1.0 percent spike. The manufacturing component, which has been uneven but still positive this year, also spiked 1.0 percent in April with the May consensus also at 0.2 percent. Capacity utilization is expected to firm slightly to 76.8 percent vs April's 76.7 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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