Econoday Economic Report: Industrial Production June 15, 2012

2012 Economic Calendar

Resource Center » U.S. & Intl Recaps | Event Release Dates | Event Definitions | Today's Calendar

Industrial Production

Released On 6/15/2012 9:15:00 AM For May, 2012

	Prior	Prior Revised	Consensus	Consensus Range	Actual
Production - M/M change	1.1 %	1.0 %	0.0 %	-0.2 % to 0.3 %	-0.1 %
Capacity Utilization Rate - Level	79.2 %	79.2 %	79.2 %	78.7 % to 79.4 %	79.0 %
Manufacturing - M/M	0.6 %	0.7 %	-0.3 %	-0.3 % to 0.1 %	-0.4 %

Highlights
Industrial production dipped in May with weakness in manufacturing and strength in mining and utilities. Overall industrial production slipped 0.1 percent, following a rebound of 1.0 percent in April (originally up 1.1 percent). Analysts expected no change.

By major components, manufacturing fell 0.4 percent, following a 0.7 percent jump in April (previously up 0.6 percent). The consensus called for a 0.3 percent decrease for the manufacturing component. Motor vehicles output declined 1.5 percent after a 4.0 percent surge in April. Manufacturing excluding motor vehicles declined 0.3 percent after a 0.5 percent boost the prior month.

In May, mining output rebounded 0.9 percent, following a 0.6 percent drop the month before. Utilities output rose 0.8 percent, following a 5.3 percent surge in April.

Overall capacity utilization eased to 79.0 percent from 79.2 percent in April. The market forecast was for 79.2 percent.

Manufacturing had some pullback in May after a robust April. However, manufacturing surveys, including today's Empire State report, point to modest forward momentum.

The traditional non-NAICS numbers for industrial production may differ marginally from the NAICS basis figures.

Market Consensus before announcement
Industrial production in April jumped 1.1 percent, following a decline of 0.6 percent in March. By major components, manufacturing rebounded 0.6 percent, following a 0.5 percent decrease in March. Motor vehicles led manufacturing with a 3.9 percent monthly surge after a 1.2 percent rise in March. Still, manufacturing excluding motor vehicles gained 0.3 percent, following a 0.6 percent dip the month before. In April, utilities output jumped 4.5 percent. Atypically warm weather held down utilities output in the first quarter and April's number reflects a return to a normal trend. Mining output increased 1.6 percent. Overall capacity utilization improved to 79.2 percent from 78.4 percent in March. Looking ahead, the manufacturing component in industrial production is likely to be negative as production worker hours in manufacturing fell 0.5 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 2007. The capacity index, which is an estimate of sustainable potential output, is also expressed as a percentage of actual output in 2007. The rate of capacity utilization equals the seasonally adjusted output index expressed as a percentage of the related capacity index. 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

2012 Release Schedule

Released On: 1/18 2/15 3/16 4/17 5/16 6/15 7/17 8/15 9/14 10/16 11/16 12/14

Release For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Important Legal Notice: Econoday has attempted to verify the information contained in this calendar. However, any aspect of such info may change without notice. Econoday does not provide investment advice, and does not represent that any of the information or related analysis is accurate or complete at any time. Legal Notices © 1998-2012 Econoday, Inc. All Rights Reserved.

Actual Data Source: Haver Analytics