2017 Economic Calendar
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Industrial Production  
Released On 10/17/2017 9:15:00 AM For Sep, 2017
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change-0.9 %-0.7 %0.2 %-0.9 % to 0.8 %0.3 %
Manufacturing - M/M-0.3 %-0.2 %0.4 %0.0 % to 0.6 %0.1 %
Capacity Utilization Rate - Level76.1 %75.8 %76.2 %75.4 % to 76.6 %76.0 %

Highlights
The factory sector isn't showing much life based on the Federal Reserve's industrial production report where the manufacturing component managed only a 0.1 percent increase in September which is 3 tenths below Econoday's consensus and only the 2nd gain in 5 months. August manufacturing is revised 1 tenth higher to minus 0.2 percent but July, a month free of hurricane effects, is revised sharply downward from unchanged to minus 0.4 percent.

The report's 2 other components bounced back into positive ground in September, up 0.4 percent for mining and up 1.5 percent for utilities. Mining volumes have been very strong this year with this component up 9.8 percent from a year ago while utility output, in contrast, is down 4.1 percent.

Turning back to manufacturing, production is up only 1.0 percent year-on-year, pulled down by a 3.2 percent yearly decline for motor vehicles & parts which, like the manufacturing headline, managed only a 0.1 percent gain on the month. Excluding vehicles, manufacturing still sits with only a 0.1 percent monthly gain. The report's selected hi-tech component is September's highlight, up 1.7 percent on the month for a 2.3 percent yearly gain.

But there are not a lot highlights in today's report as the weakness in manufacturing, given this year's enormous strength in private reports like Empire State and ISM, remains an unfortunate surprise. One plus is that hurricane effects, though visible in August's mining and utility output, proved limited. Overall capacity utilization in September came in at 76.0 percent which is 2 tenths below the consensus.

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

Recent History Of This Indicator
However much diffusion reports like Empire State have been recording strength, the Federal Reserve's industrial production report has been showing weakness for manufacturing: a 0.3 percent decline for the component in August, no change in July, a 0.2 percent gain in June, and a 0.5 percent drop in May. But the weakness in August was tied at least in part to one-time effects from Hurricane Harvey and forecasters are calling for a 0.4 percent September gain. But the outlook for the total industrial production, the result of uncertainties over hurricane effects on mining and utility demand, is very wide, from minus 0.9 percent to plus 0.8 percent with the consensus at plus 0.2 percent. Capacity utilization is seen at 76.2 percent vs 76.1 in August.

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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