2018 Economic Calendar
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Industrial Production  
Released On 5/16/2018 9:15:00 AM For Apr, 2018
PriorPrior RevisedConsensusConsensus RangeActual
Production - M/M change0.5 %0.7 %0.6 %0.2 % to 0.9 %0.7 %
Manufacturing - M/M0.1 %0.0 %0.3 %0.1 % to 1.0 %0.5 %
Capacity Utilization Rate - Level78.0 %77.6 %78.3 %78.2 % to 78.5 %78.0 %

Highlights
Unequivocal strength is the message from industrial production which rose 0.7 percent in April on top of an upward revised 0.7 percent gain in March. Manufacturing production moved 0.5 percent higher to beat Econoday's consensus by 2 tenths. Mining once again leads the gains with a 1.1 percent surge in the month with utility output also positive at a 1.9 percent gain.

The standout gain in the manufacturing comes from business equipment where volumes rose 1.2 percent and which point to second-quarter strength for business investment. Production of consumer goods is right behind with a 0.9 percent gain. And the gains in manufacturing come despite a step back for vehicle production which fell 1.3 percent. Showing no tariff effects are construction supplies which rose 0.3 percent in the month.

Mining has been the strength of this report for the past year, reflected in the year-on-year volume gain of 10.6 percent, a contrast to manufacturing where the year-on-year comparison is up only 1.8 percent. The yearly gain for utilities is 6.0 percent.

Capacity utilization may be showing a little stress, rising 4 tenths to 78.0 percent overall against, however, a sharply downward revised 77.6 percent in March. There is clearly more slack in manufacturing where the rate is 75.8 percent, up 3 tenths in the month.

Manufacturing in this report may finally be coming alive, joining the host of small sample surveys which have long been reporting strength and moving perhaps in line with acceleration underway in the factory orders report. Though tariff effects are a wildcard, manufacturing looks to be an outstanding contributor to this year's economic growth.

Consensus Outlook
Mining has been the strength of the industrial production report which is expected to rise a solid 0.6 percent in April. Manufacturing has been uneven in this report though a respectable 0.3 percent gain is April's call. Pressures on capacity utilization have until now been limited though forecasters are looking for a sizable 3 tenth gain to 78.3 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
 
 

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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