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Economy in Brief

U.S. Industrial Production Posts Strong Rebound
by Tom Moeller  May 17, 2016

Industrial output increased 0.7% during April (-1.1% y/y) following declines in six of the prior seven months. It was the largest increase since November 2014. A 0.3% rise in output had been expected in the Action Economics Forecast Survey.

A 5.8% increase in utility output (0.4% y/y) led last month's increase in total production. Natural gas output rebounded 9.3% (-0.5% y/y), while electric power generation jumped 5.4% (0.5% y/y). Mining sector production offset some of these increases, however, with a 2.3% fall (-13.4% y/y).

Factory sector production recovered 0.3% last month (0.4% y/y) following an unrevised 0.3% drop. Consumer goods production jumped 1.2% (1.3% y/y) as motor vehicle output & parts output recovered 1.3% (4.3% y/y) after a 1.4% drop. Electrical equipment production declined 0.9% (-0.5% y/y), but machinery output jumped 2.4% (-3.8% y/y). Computer & electronic product production rose 0.2% (3.0% y/y).

In the nondurable goods sector, petroleum & coal production declined 3.4% (+2.2% y/y), and chemical output eased 0.3% (+1.0% y/y). Apparel output declined 2.3% (-8.3% y/y) while paper product production remained unchanged (-2.5% y/y).

In the subcategory groupings, output of high technology products edged 0.1% higher (2.4% y/y) as semiconductor production increased 1.3% (0.3% y/y). Computer & office equipment production fell 0.8% (-4.0% y/y). Communications equipment eased 0.6% (+11.4% y/y). Overall factory sector production excluding the high-tech & motor vehicle sectors recovered 0.2% after a 0.2% fall, and was unchanged y/y.

Capacity utilization increased to 75.4% last month from 74.9%, revised from 74.8%. That remained down from 78.9% in November 2014. Factory sector utilization improved to 75.3%, but was down from the 2014 high of 76.3%. Industry capacity rose 1.0% y/y while factory sector capacity improved 0.8% 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) Apr Mar Feb Apr Y/Y 2015 2014 2013
Total Output 0.7 -0.9 -0.2 -1.1 0.3 2.9 1.9
Manufacturing 0.3 -0.3 0.0 0.4 0.8 1.3 0.9
    Consumer Goods 1.2 -0.8 -0.1 1.3 1.4 0.7 0.7
    Business Equipment 0.8 -0.3 0.5 -0.4 0.7 2.4 -0.2
    Construction Supplies 0.0 -0.6 -0.1 1.7 1.5 3.7 3.0
  Materials 0.4 -1.0 -0.5 -2.9 0.5 4.7 3.3
Utilities 5.8 -3.3 -1.0 0.4 -0.7 1.3 2.3
Mining -2.3 -3.0 -0.7 -13.4 -1.8 11.0 6.5
Capacity Utilization (%) 75.4 74.9 75.6 76.9 76.7 78.2 76.9
 Manufacturing 75.3 75.1 75.4 75.6 75.5 75.4 74.5
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