2018 Economic Calendar
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Industrial Production  
Released On 2/15/2018 9:15:00 AM For Jan, 2018
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change0.9 %0.4 %0.2 %-0.3 % to 0.5 %-0.1 %
Manufacturing - M/M0.1 %0.0 %0.2 %-0.1 % to 0.3 %0.0 %
Capacity Utilization Rate - Level77.9 %77.7 %78.0 %77.7 % to 78.2 %77.5 %

Highlights
Weakness in industrial production underscores what has been the Federal Reserve's very modest assessment of the factory sector. Industrial production fell 0.1 percent in January with December revised 5 tenths lower to a 0.4 percent gain which is offset in part by a 4 tenths upward revision to November which is now at plus 0.3 percent. The manufacturing component, that is the Federal Reserve's own measurement of goods volumes, is unchanged with both December and November revised 1 tenth lower to unchanged and up 0.2 percent.

The report's two smaller components are mixed. Utility production rose 0.6 percent in the month on top of December's 4.6 percent weather-related surge with the year-on-year rate at a very strong 10.8 percent. Mining, which had been strong, fell 1.0 percent in January with December revised sharply lower to minus 0.4 percent. On a yearly comparison, mining production is still very strong at an 8.8 percent gain.

But manufacturing production makes up the great bulk of this report and is up only 1.8 percent on the year in what is a far cry from the surging strength evident in small-sample regional reports such as this morning's Philly Fed and Empire State. This report, again in contrast to the anecdotal data, is not consistent with building inflation pressures, evident in capacity utilization which is down 2 tenths to 77.5 percent and a 1/2 point under expectations. For the FOMC, today's results do not turn up pressure for more hawkish policy.

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

Consensus Outlook
The manufacturing component of this report has been an anomaly, showing a long trend of marginal growth against a full year of record readings in regional and private samples and now sharp acceleration underway for actual factory orders and shipments. And yet manufacturing hours were down in the January employment report and have forecasters calling for another weak month of production in this report, at a consensus January gain of only 0.2 percent following a 0.1 percent gain in December. The report's two other components, mining and utilities, have been mixed with the former showing strong growth but the latter up and down on weather-related demand. Taken all together, the consensus gain for January industrial production is, like that for manufacturing, 0.2 percent with total capacity utilization seen rising 1 tenth to 78.0 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
 
 

2018 Release Schedule
Released On: 1/172/153/164/175/166/157/178/159/1410/1611/1612/14
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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