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Economy in Brief

U.S. Industrial Production Is Unchanged; Factory Output Improves Steadily
by Tom Moeller  March 17, 2017

Industrial production remained unchanged (+0.3% y/y) during February following a 0.1% January slip, revised from -0.3%. A 0.2% increase had been expected in the Action Economics Forecast Survey. Warm temperatures again provided a decided influence on the overall reading, lessening utilities output by 5.7% (-7.0% y/y), about as it did in January. To the upside, manufacturing sector output strengthened 0.5% (1.2% y/y) following the same-sized January increase, revised from 0.2%. These were the strongest back-to-back results since late-2012. Mining output jumped 2.7% (1.8% y/y) following a 2.2% gain.

Output of construction supplies benefited from the warm weather and increased 1.3% (1.7% y/y), about the same as in January. Business equipment also rose a firm 0.7% (1.6% y/y), strengthened by a 1.2% jump (2.1 % y/y) in the production of industrial equipment. A 0.4% decline (+0.1% y/y) in consumer goods production reflected a 5.6% slide (-7.3% y/y) in energy product output. Nondurable, nonenergy consumer goods production rose 0.3% (0.1% y/y) driven by a 0.8% rise (1.9% y/y) in foods & tobacco. Chemical production eased 0.2% (-1.9% y/y) but clothing production held steady (-4.1% y/y). Durable consumer goods  output also remained unchanged (+0.3% y/y), held back by a 3.6% drop (+0.5% y/y) in appliance & furniture production. A 0.4% rise (3.6% y/y) in auto production countered this decline, while output of computers, audio and video product production remained unchanged (+2.1% y/y).

Materials production eased 0.1% (+0.2% y/y), held back by a 1.7% decline (-0.5% y/y) in textile product output and a 1.5% drop (-2.1% y/y) in energy materials.

Amongst the special aggregate series, high-technology product production increased 0.2% (6.4% y/y. Factory output excluding high technology products rose 0.5% (0.9% y/y). Factory output excluding both high-tech and motor vehicles gained 0.5% (0.9% y/y).

Capacity utilization slipped to 75.4% with the decline in utility output. Factory sector utilization increased to 75.6%, its highest level since August 2015. Factory sector capacity rose 0.9% y/y, its quickest annual rate of increase since late-2015.

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) Feb Jan Dec Feb Y/Y 2016 2015 2014
Total Output 0.0 -0.1 0.6 0.3 -1.0 0.3 2.9
Manufacturing 0.5 0.5 0.2 1.2 0.1 0.8 1.3
    Consumer Goods -0.4 -0.1 1.2 0.1 0.7 1.4 0.7
    Business Equipment 0.7 -0.1 0.9 1.6 -0.8 0.7 2.4
    Construction Supplies 1.3 1.4 -0.3 1.7 1.1 1.5 3.7
  Materials -0.1 -0.1 0.3 0.2 -2.0 0.5 4.7
Utilities -5.7 -5.8 5.4 -7.0 -0.2 -0.7 1.3
Mining 2.7 2.2 -1.4 1.8 -9.3 -1.8 11.0
Capacity Utilization (%) 75.4 75.5 75.6 75.6 75.4 76.7 78.2
 Manufacturing 75.6 75.3 75.0 75.4 75.0 75.5 75.4
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