2017 Economic Calendar
POWERED BY  econoday logo
U.S. & Intl Recaps   |   Event Definitions   |   Today's Calendar   |   

Industrial Production  
Released On 9/15/2017 9:15:00 AM For Aug, 2017
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change0.2 %0.4 %0.1 %-1.3 % to 0.5 %-0.9 %
Manufacturing - M/M-0.1 %0.0 %0.1 %-0.4 % to 0.5 %-0.3 %
Capacity Utilization Rate - Level76.7 %76.9 %76.7 %75.6 % to 77.0 %76.1 %

Highlights
The biggest hurricane hit yet comes not in consumption but on the production side of the economy as industrial production fell 0.9 percent in August which is within Econoday's consensus range but against a median call for a 0.1 percent gain. The report's three components all show declines: utilities down 5.5 percent on forced outages following Harvey; mining down 0.8 percent on lower output of oil and natural gas; and manufacturing down 0.3 percent reflecting declines in machinery and nondurables despite a rise in vehicle production that followed three straight declines.

Capacity utilization reflects August's weakness, down 8 tenths to 76.1 percent. Revisions are mixed with July revised 2 tenths higher to plus 0.4 percent but June revised 2 tenths lower to plus 0.4 percent. May is revised 1 tenth higher to unchanged.

Hurricane effects are temporary and will be reversed yet they are certain to affect September's report given extending disruptions from Harvey and Irma's hit on Florida. The manufacturing component of this report tells a key story right now of the 2017 economy: four straight months of trouble that include two contractions. Regional surveys based on anecdotal responses from small samples, such as this morning's Empire State report, have not been picking up this weakness.

Recent History Of This Indicator
The 0.1 percent dip in the manufacturing component of the industrial production report was one of the few negatives in all of July's economic data. But forecasters are only calling for a limited bounce to plus 0.1 percent for manufacturing in August and only a 0.1 percent gain for total industrial production vs a 0.2 percent rise in July. Note that negative month-end effects from Hurricane Harvey are possible. Capacity utilization is expected to remain unchanged at 76.7 percent.

Definition
The Federal Reserve's monthly index of industrial production and the related capacity indexes and capacity utilization rates cover manufacturing, mining, and electric and gas utilities. The industrial sector, together with construction, accounts for the bulk of the variation in national output over the course of the business cycle. The production index measures real output and is expressed as a percentage of real output in a base year, currently 2012. The capacity index, which is an estimate of sustainable potential output, is also expressed as a percentage of actual output in 2012. The rate of capacity utilization equals the seasonally adjusted output index expressed as a percentage of the related capacity index.

The index of industrial production is available nationally by market and industry groupings. The major groupings are comprised of final products (such as consumer goods, business equipment and construction supplies), intermediate products and materials. The industry groupings are manufacturing (further subdivided into durable and nondurable goods), mining and utilities. The capacity utilization rate -- reflecting the resource utilization of the nation's output facilities -- is available for the same market and industry groupings.

Industrial production was also revised to NAICS (North American Industry Classification System) in the early 2000s. Unlike other economic series that lost much historical data prior to 1992, the Federal Reserve Board was able to reconstruct historical data that go back more than 30 years.  Why Investors Care
 
[Chart]
The industrial sector accounts for less than 20 percent of GDP. Yet, it creates much of the cyclical variability in the economy.
Data Source: Haver Analytics
 
[Chart]
The capacity utilization rate reflects the limits to operating the nation's factories, mines and utilities. In the past, supply bottlenecks created inflationary pressures as the utilization rate hit 84 to 85 percent.
Data Source: Haver Analytics
 
 

2017 Release Schedule
Released On: 1/182/153/174/185/166/157/148/179/1510/1711/1612/15
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


powered by  [Econoday]