Monday, June 15, 2015

Fed: Industrial Production decreased 0.2% in May

by Bill McBride on 6/15/2015 09:29:00 AM

From the Fed: Industrial production and Capacity Utilization

Industrial production decreased 0.2 percent in May after falling 0.5 percent in April. The decline in April was larger than previously reported, but the rates of change for previous months were generally revised higher, leaving the level of the index in April slightly above its initial estimate. Manufacturing output decreased 0.2 percent in May and was little changed, on net, from its level in January. In May, the index for mining moved down 0.3 percent after declining more than 1 percent per month, on average, in the previous four months. The slower rate of decrease for mining output last month was due in part to a reduced pace of decline in the index for oil and gas well drilling and servicing. The output of utilities increased 0.2 percent in May. At 105.1 percent of its 2007 average, total industrial production in May was 1.4 percent above its year-earlier level. Capacity utilization for the industrial sector decreased 0.2 percentage point in May to 78.1 percent, a rate that is 2.0 percentage points below its long-run (1972–2014) average.
emphasis added

Capacity Utilization Click on graph for larger image.

This graph shows Capacity Utilization. This series is up 11.1 percentage points from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 78.1% is 2.0% below the average from 1972 to 2012 and below the pre-recession level of 80.8% in December 2007.

Note: y-axis doesn't start at zero to better show the change.

Industrial Production The second graph shows industrial production since 1967.

Industrial production decreased 0.2% in May to 105.1. This is 25.5% above the recession low, and 4.3% above the pre-recession peak.

This was below expectations of a 0.2% increase, although prior months were revised up - and much of the decline over the last several months was due to the a decline in oil and gas well drilling.