2018 Economic Calendar
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Industrial Production  
Released On 8/15/2018 9:15:00 AM For Jul, 2018
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change0.6 %1.0 %0.3 %0.1 % to 0.7 %0.1 %
Manufacturing - M/M0.8 %0.3 %0.1 % to 0.7 %0.3 %
Capacity Utilization Rate - Level78.0 %78.1 %78.2 %77.9 % to 78.5 %78.1 %

Highlights
A respectable 0.3 percent rise in manufacturing volumes is the takeaway from a deceptively soft industrial production report for July which managed only a 0.1 percent headline gain to come in at the bottom of Econoday's consensus range. Pulling down the headline was a rare 0.3 percent decline in mining volumes and a third straight decline, at minus 0.5 percent, for utilities where weather is always a factor. An important offset to July is a sharp upward revision to June which now stands at a 1.0 percent overall gain and which reflects upward revisions to both mining, now at a 2.9 percent rise in the prior month vs an initial 1.2 percent, and also utilities which are now at a 0.7 percent June decline vs an initial dip of 1.5 percent.

The gain in manufacturing is centered in vehicle production which rose 0.9 percent in July to offset a subdued 0.1 percent gain for the selected hi-tech category. And production of business equipment was especially strong in the month, at a 0.8 percent gain vs no change for consumer goods. Construction supplies, down 0.1 percent, fell for a second month and won't be helping shortages in the industry.

Capacity utilization was unchanged in July at 78.1 percent which is a moderate rate that points, despite all the warnings of stress in regional and private reports, to spare capacity still remaining in the industrial sector, a factor that will help limit goods inflation. The dip in mining aside (where by the way the year-on-year gain is a scorching 12.9 percent), this is a very solid report consistent with general economic strength.

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

Consensus Outlook
Industrial production has been up and down in recent months on swings in the dominant component of manufacturing. Mining, a smaller component, has been consistently robust. Econoday's July consensus for industrial production is a 0.3 percent gain with manufacturing also seen rising 0.3 percent. The consensus for capacity utilization is 78.2 percent vs June's 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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