by Bill McBride on 11/16/2012 09:15:00 AM
Friday, November 16, 2012
Industrial Production decreased 0.4% in October due to Hurricane Sandy, Capacity Utilization decreased
From the Fed: Industrial production and Capacity Utilization
Industrial production declined 0.4 percent in October after having increased 0.2 percent in September. Hurricane Sandy, which held down production in the Northeast region at the end of October, is estimated to have reduced the rate of change in total output by nearly 1 percentage point. The largest estimated storm-related effects included reductions in the output of utilities, of chemicals, of food, of transportation equipment, and of computers and electronic products. In October, the index for manufacturing decreased 0.9 percent; excluding storm-related effects, factory output was roughly unchanged from September. The output of utilities edged down 0.1 percent in October, and production at mines advanced 1.5 percent. At 96.6 percent of its 2007 average, total industrial production in October was 1.7 percent above its year-earlier level. Capacity utilization for total industry decreased 0.4 percentage point to 77.8 percent, a rate 2.5 percentage points below its long-run (1972--2011) average.Click on graph for larger image.
This graph shows Capacity Utilization. This series is up 10.9 percentage points from the record low set in June 2009 (the series starts in 1967).
Capacity utilization at 77.8% is still 2.5 percentage points below its average from 1972 to 2010 and below the pre-recession level of 80.6% in December 2007.
Note: y-axis doesn't start at zero to better show the change.
The second graph shows industrial production since 1967.
Industrial production decreased in October to 96.6. This is 15% above the recession low, but still 4.1% below the pre-recession peak.
IP was slightly below expectations due to the impact of Hurricane Sandy. We will probably see some bounce back over the next couple of months.
Posted by Bill McBride on 11/16/2012 09:15:00 AM