2018 Economic Calendar
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Industrial Production  
Released On 1/17/2018 9:15:00 AM For Dec, 2017
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change0.2 %-0.1 %0.4 %0.3 % to 0.8 %0.9 %
Manufacturing - M/M0.2 %0.3 %0.3 %0.0 % to 0.5 %0.1 %
Capacity Utilization Rate - Level77.1 %77.2 %77.3 %77.2 % to 77.8 %77.9 %

Another surge in mining and a bounce in utilities offset another disappointment for manufacturing to drive industrial production up 0.9 percent in December to just top Econoday's high estimate. Mining production, up a year-on-year 11.5 percent, has been rising in large monthly clips including December at 1.6 percent. Utility production often swings month-to-month based on weather and rose 5.6 percent in December in contrast to the yearly change which is very modest at plus 1.8 percent.

Manufacturing volumes have also been very modest, at a monthly gain of only 0.1 percent and a year-on-year increase at a very modest 2.4 percent. But December's details are surprisingly positive with vehicle production a highlight, up 2.0 percent in the month, and also selected hi-tech at a solid plus 0.4 percent. Non-durables declined 0.1 percent in the month while production of construction supplies, despite strength in other readings on the sector, was unchanged.

The lack of strength in manufacturing volumes in this report, which is produced by the Federal Reserve, has been a consistent surprise and stands out against factory orders data where year-on-year shipments and new orders growth, measured in dollar terms and produced by the Commerce Department, is in the mid-to-high single digits and, most importantly, is showing acceleration. Another report released by the Federal Reserve where flat is the direction and modest-to-moderate the theme is the Beige Book which will be posted this afternoon.

Note that traditional non-NAICS numbers for industrial production may differ marginally from NAICS basis figures.

Consensus Outlook
Econoday's consensus gain for December industrial production is 0.4 percent which would follow November's 0.2 percent rise. Mining rose in December but utilities dipped and it was in fact a 0.2 percent gain for the manufacturing component that set the modest pace of November's report. Vehicle and hi-tech production eased in November while the production of consumer goods fell noticeably. Based on factory hours in December's employment report, forecasters see the manufacturing component rising a moderate 0.3 percent to extend what has been a stubbornly soft trend for this series. Total capacity utilization in December is seen rising 2 tenths to 77.3 percent.

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
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
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

2018 Release Schedule
Released On: 1/172/153/164/175/166/157/178/159/1410/1611/1612/14
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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