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Economy in Brief

U.S. Industrial Production Strengthens; Factory Output Ticks Higher
by Tom Moeller  April 17, 2018

The Federal Reserve reported that industrial production increased 0.5% (4.3% y/y) during March following a 1.0% February rise, revised from 1.1%. A 0.4% rise had been expected in the Action Economics Forecast Survey. Factory sector production improved 0.1% (3.0% y/y) after a 1.5% jump. Utility output surged 3.0% (5.4% y/y) and contrasted with February's 5.0% decline. Mining production strengthened 1.0% (10.8% y/y) following a 2.9% increase.

Strength in factory sector output reflected a 0.5% increase (4.4% y/y) in the production of business equipment which followed a 0.6% gain. Transit equipment production rose 1.3% (5.5% y/y) following a 2.0% increase, and information processing & related product output gained 0.7% (4.5% y/y) and repeated the prior month's rise.

Total consumer goods production also increased 0.5% (3.6% y/y) following two months of lesser increase. Durable consumer goods production rose 0.9% (4.5% y/y) after a 2.9% increase. Automotive product output jumped 2.7% (7.3% y/y) following a 3.6% gain. Computer, video & related production gained a steady 2.6% (11.4% y/y). Appliance, furniture & carpeting production declined 2.8% (-0.5% y/y) following a 1.9% rise. Nondurable consumer goods production increased 0.4% (3.3% y/y) following a 0.5% decline. Energy product output rebounded 3.9% (5.2% y/y) after a 7.0% decline. Apparel production fell 0.5% (-1.7% y/y) after three months of strong increase. Paper product output rose 0.5% (-3.5% y/y) after a  1.4% increase. Chemical product production rose 0.4% (4.4% y/y) after a 0.4% rise.

Construction supplies output decreased 0.3% (+3.4%y/y) after a 2.9% strengthening.

Production of materials improved 0.6% (5.4% y/y) after a 1.5% increase. Energy product materials output surged 1.2% (9.5% y/y) after a 1.0% increase. Durable goods materials output ticked 0.1% higher (3.5% y/y) and nondurable goods materials rose 0.2% (2.2% y/y) following a 1.5% rise.

In the special aggregate groupings, production in selected high-technology industries rose 1.2% (8.9% y/y) following a 0.5% gain. Nonenergy production excluding high-tech eased 0.1% (+2.8% y/y) following a 1.8% increase. Factory sector production excluding both high-tech and autos slipped 0.2% (+2.3% y/y) after a 1.3% jump.

Capacity utilization increased to 78.0%, the highest level since March 2015. Factory sector capacity utilization slipped to 75.9%.

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.

How Much Consumption Responds to Government Stimulus from the Federal Reserve Bank of San Francisco is available here.

Industrial Production (SA, % Change) Mar Feb Jan Mar Y/Y 2017 2016 2015
Total Output 0.5 1.0 -0.2 4.3 1.6 -2.0 -1.0
Manufacturing 0.1 1.5 -0.4 3.0 1.2 -0.8 0.1
    Consumer Goods 0.5 0.2 0.3 3.6 0.0 0.7 1.5
    Business Equipment 0.5 0.6 0.1 4.4 3.2 -5.3 -2.0
    Construction Supplies -0.3 2.9 -1.7 3.4 2.5 0.9 0.6
  Materials 0.6 1.5 -0.4 5.4 2.0 -3.0 -1.5
Utilities 3.0 -5.0 2.1 5.4 -1.3 -0.4 -0.8
Mining 1.0 2.9 -0.9 10.8 6.4 -9.7 -3.4
Capacity Utilization (%) 78.0 77.7 77.1 75.5 78.1 75.4 77.3
 Manufacturing 75.9 76.0 74.9 74.3 74.8 74.6 75.8
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