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Economy in Brief

U.S. Industrial Production Declines for the Third Straight Month
by Tom Moeller  January 15, 2016

Overall industrial output declined 0.4% during December following a 0.9% November fall, revised from -0.6%. It was the third consecutive monthly decline and lessened the 2015 increase to 1.3%, its weakest rise in six years. The Action Economics Forecast Survey expected a 0.3% fall.

A 2.0% decline (-7.6% y/y) in utility output accounted for most of last month's shortfall in production. Mining output also eased 0.8% (-11.3% y/y), down for the fourth straight month.

Manufacturing sector production fell 0.1% (+0.8% y/y) for the fourth month in the last five. The 2.0% full year increase was the weakest rise since 2013. Consumer products output fell 0.8% (+0.3% y/y), pulled down by a 1.7% drop (+3.7% y/y) in motor vehicle production. Furniture production fell 0.9% (+1.7% y/y) and machinery production declined 0.5% (-3.0% y/y). In the nondurable goods sector, chemical output was off 0.5% (+1.2% y/y) and apparel production declined 0.3% (-7.0% y/y). Materials production eased 0.3% (-3.1% y/y).

In the special aggregate series, output of high technology products gained 1.4% (1.7% y/y). Output of computers increased 3.0% (8.1% y/y) and bounced back after November's drop. Communications equipment production increased 0.1% (-6.4% y/y) for the second straight month. Overall production excluding the transportation & high technology sectors fell 0.4% (-2.2% y/y), off for the fourth consecutive month. Factory output excluding autos & high tech was unchanged for a second month (+0.5% y/y).

Capacity utilization fell to 76.5%, the lowest rate since July 2013. In the factory sector, the capacity utilization rate eased to 76.0%, the lowest level in six months. Overall industry capacity rose 1.5% y/y while in factory sector it gained (1.2% y/y).

Industrial production and capacity data are included in Haver's USECON database, with additional detail in the IP database. The expectations figure is in the AS1REPNA database.

Industrial Production (SA, % Change) Dec Nov Oct Dec Y/Y 2015 2014 2013
Total Output -0.4 -0.9 -0.2 -1.8 1.3 3.7 1.9
Manufacturing -0.1 -0.1 0.4 0.8 2.0 2.5 0.9
    Consumer Goods -0.8 -0.6 -0.2 0.3 2.1 2.2 1.5
    Business Equipment 0.1 -1.0 -0.4 -0.8 1.9 4.8 -0.4
    Construction Supplies 0.6 0.0 2.2 1.6 2.7 3.9 2.8
  Materials -0.3 -1.2 -0.5 -3.1 1.4 5.1 3.1
Utilities -2.0 -5.0 -1.8 -7.6 -1.7 1.0 2.5
Capacity Utilization (%) 76.5 76.9 77.7 79.0 77.8 78.1 76.7
 Manufacturing 76.0 76.1 76.3 76.3 76.1 75.3 74.0
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