Wednesday, December 16, 2015

Fed: Industrial Production decreased 0.6% in November

by Bill McBride on 12/16/2015 09:25:00 AM

From the Fed: Industrial production and Capacity Utilization

Industrial production declined 0.6 percent in November after decreasing 0.4 percent in October. In November, manufacturing production was unchanged from October. The index for utilities dropped 4.3 percent, as unusually warm weather held down the demand for heating. The index for mining fell 1.1 percent in November, with much of this decrease attributable to sizable declines for coal mining and for oil and gas well drilling and servicing. At 106.5 percent of its 2012 average, total industrial production in November was 1.2 percent below its year-earlier level. Capacity utilization for the industrial sector declined 0.5 percentage point in November to 77.0 percent, a rate that is 3.1 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 10.1 percentage points from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 77.0% is 3.1% 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 0.6% in November to 106.5. This is 22.1% above the recession low, and 1.3% above the pre-recession peak.

This was below expectations of a 0.2% decrease, partially due to the warm weather.

The weather is boosting some sectors - like housing starts - and hurting other sectors like heating utilities.