Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Industrial Production Declined 0.2% in September
Posted Under: Data Watch • Industrial Production - Cap Utilization
Supporting Image for Blog Post

 
Implications: The most important part of today's report on industrial production wasn't the change in September itself, but upward revisions to prior months. Both overall production and manufacturing shrank slightly in September, as the consensus expected. But upward revisions to prior months mean the level of activity in September was higher than anticipated. Now that we have September figures, as well as those revisions, we can see that output was up at a 1.9% annual rate in the third quarter, consistent with our forecast that real GDP grew at Plow Horse 1.5% rate. Given lower oil energy prices, mining continues to be a headwind for the economy, dropping 2% in September, led by a 3.8% decline in drilling of oil and gas wells. However, we don't think declines in drilling and extraction will last much longer. Productivity gains in energy production from new technologies continue to drive down costs on almost a daily basis. As oil prices bottom out, drilling activity should start to climb again, even if oil prices stay low relative to recent years. Meanwhile, utility output rose 1.3% in September due to warmer-than-usual temperatures, which boosted AC use. Cutting through the month-to-month volatility, overall industrial production and manufacturing ex-autos are up 0.4% and 0.8%, respectively, from a year ago, and the fundamentals favor further growth in the year ahead. Companies are sitting on huge cash reserves and corporate cash flow is at a record high.

Click here for PDF version
Posted on Friday, October 16, 2015 @ 10:25 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.