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Economy in Brief

U.S. Industrial Production Rebounds
by Tom Moeller  February 17, 2016

Overall industrial production jumped 0.9% during January (-0.7% y/y) following declines in the prior three months. It was the largest increase since November 2014. A 0.3% rise had been expected in the Action Economics Forecast Survey. December's decline was revised to -0.7% from -0.4% reported last month. The latest increase in overall production was paced by a 5.4% jump (-2.8% y/y) in utility output. That was accompanied by no change (-9.8% y/y) in mining production, which followed four consecutive months of sharp decline.

Factory sector production increased 0.5% (1.2% y/y) after two months of 0.2% decline. A 1.6% jump (1.3% y/y) in consumer goods output was powered by a 2.8% gain (6.2% y/y) in motor vehicles & parts. The rise followed, however, two months of sharp decline. Primary metals production also posted a solid 2.2% improvement (-2.4% y/y). Furniture output gained 1.4% (2.3% y/y) after a 2.3% fall and machinery production strengthened 0.7% (-4.1% y/y), following three straight months of sharp decline. To the downside, electrical equipment production fell 1.4% (+5.8% y/y) after a 2.1% rise.

In the nondurable goods sector, industrial production improved 0.5% (1.7% y/y) after three months of little change. Apparel output fell 2.1% (-9.1% y/y) and is off roughly 80% during the last twenty years. Output of petroleum & coal products eased 0.2% (+1.3% y/y), down for the third straight month. To the upside, food, beverage & tobacco manufacturing gained 0.8% (2.2% y/y) while chemical output increased 1.1% (2.8% y/y).

Business equipment production improved 0.3% (-1.4% y/y) as transit equipment production gained 0.3% (-0.2% y/y). Materials output strengthened 0.9% (-1.5% y/y) after three months of decline.

In the special aggregate groupings, production of high technology products increased 0.6% (1.6% y/y) following a 0.9% rise. The gain was powered by a 3.7% jump (1.1% y/y) in computers & equipment after a 1.7% strengthening. Semiconductor output rose 0.4% (2.6% y/y), but communications equipment production fell 0.8% (-1.9% y/y). Overall factory sector production, excluding both autos and high-tech, increased 0.3% (0.9% y/y).

The capacity utilization rate increased to 77.1% last month. That remained down, however, from 78.7% twelve months earlier. Utilization in the factory sector improved to 76.1%, equaling the rate last January. Utilization in the mining industry ticked up m/m to 78.8%, but that remained down from the 2014 high of 91.6%. Overall industry capacity rose 1.3% y/y and factory sector capacity increased 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) Jan Dec Nov Jan Y/Y 2015 2014 2013
Total Output 0.9 -0.7 -0.8 -0.7 1.3 3.7 1.9
Manufacturing 0.5 -0.2 -0.2 1.2 2.0 2.5 0.9
    Consumer Goods 1.6 -0.7 -0.7 1.3 2.0 2.2 1.5
    Business Equipment 0.3 -0.8 -1.3 -1.4 1.8 4.8 -0.4
    Construction Supplies -0.3 0.3 0.0 1.5 2.8 3.9 2.8
  Materials 0.8 -0.7 -0.9 -1.5 1.5 5.1 3.1
Utilities 5.4 -2.9 -3.7 -2.8 -0.6 1.0 2.5
Mining 0.0 -2.1 -1.7 -9.8 -1.5 10.8 6.5
Capacity Utilization (%) 77.1 76.4 77.0 78.7 77.8 78.1 76.7
 Manufacturing 76.1 75.8 76.0 76.1 76.1 75.3 74.0
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