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Economy in Brief

U.S. Industrial Production Declines; Factory Output Eases
by Tom Moeller  December 14, 2016

Industrial output declined 0.4% during November (-0.6% y/y) following a 0.1% October uptick, revised from no change. The latest reading disappointed expectations for a 0.2% decline in the Action Economics Forecast Survey.

Factory sector production eased 0.1% last month (0.1% y/y) following a 0.3% increase. Consumer goods production fell 0.5% (+0.9% y/y) after a 0.1% easing. In the durable goods sector, computers and video & audio equipment production fell 0.8% (+2.9% y/y) after a 6.3% jump. Furniture & appliance production fell 0.8% (+0.7% y/y) following a 1.0% rise. Motor vehicle & parts production declined 2.6% (+6.4% y/y). In the nondurable goods area, clothing output declined 0.8% (-3.1% y/y), but chemical production improved 0.1% (-2.2% y/y). Paper output declined 0.5% (-5.8% y/y). In the capital goods sector, production fell 0.3% (+0.2% y/y) after a 0.1% rise. Transit equipment production fell 0.2% (-2.0% y/y), but information processing equipment increased 0.5% (5.2% y/y). Construction supplies production gained 0.7% (0.6% y/y).

In the materials sector, a 0.7% decline in output (-1.6% y/y) reflected a 0.4% decline (-0.6% y/y) in durables and a 0.1% uptick (-0.2% y/y) in nondurables. Energy materials production was off 1.7% (-3.6% y/y).

Utilities output fell 4.4% (-1.9% y/y) but mining output increased 1.1% (-4.6% y/y).

In the special industrial output groupings, computers, communications equipment & semiconductor output rose 0.1% (5.4% y/y). Computer & peripheral equipment output fell 1.7% (+19.2% y/y) but communications equipment output improved 0.5% (7.4% y/y). Overall factory sector production excluding both the high-tech and automotive sectors rose 0.1% (-0.5% y/y) following a 0.2% increase.

Capacity utilization declined to 75.0%, its lowest level since March. Factory sector utilization eased to 74.8%, but remained below the 2014 peak of 76.3%.

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) Nov Oct Sep Nov Y/Y 2015 2014 2013
Total Output -0.4 0.1 -0.2 -0.6 0.3 2.9 1.9
Manufacturing -0.1 0.3 0.2 0.1 0.8 1.3 0.9
    Consumer Goods -0.5 -0.1 -0.2 0.9 1.4 0.7 0.7
    Business Equipment -0.3 0.1 -0.2 0.2 0.7 2.4 -0.2
    Construction Supplies 0.7 0.8 0.8 0.6 1.5 3.7 3.0
  Materials -0.7 0.3 -0.5 -1.6 0.5 4.7 3.3
Utilities -4.4 -2.8 -2.7 -1.9 -0.7 1.3 2.3
Mining 1.1 1.9 -0.1 -4.6 -1.8 11.0 6.5
Capacity Utilization (%) 75.0 75.4 75.4 75.7 76.7 78.2 76.9
 Manufacturing 74.8 74.9 74.8 75.3 75.5 75.4 74.5
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