Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow First Trust: 

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 
  Industrial production declined 0.1% in January
Posted Under: Data Watch • Industrial Production - Cap Utilization

 
Implications: Industrial production declined slightly in January with overall output down 0.1% and manufacturing falling 0.4%. But the “big story” in today’s report was the large upward revisions for November/December. Including revisions for prior months, both overall production and manufacturing were up 0.5%. In addition, the upward revisions to production pushed capacity utilization in December to the highest level since 2005. It was only from that near-term peak that capacity use ticked down in January. Two factors might explain the dip in production in January itself: first, normal month-to-month volatility; second, some privately-held firms pushing production out the door before year-end so they could book revenue before higher tax rates took effect on January 1. Even including the decline in January, production has accelerated considerably in the past three months, with overall production up at a 6.8% annual rate and manufacturing up at a 10.1% annual rate. In the past year auto production is up 7.5%, while manufacturing ex-autos is up a slower 1.3%. We expect the gap between those two growth rates to narrow considerably in 2013, with slower growth in autos and faster growth elsewhere in manufacturing. Capacity utilization fell to 79.1% in December, only slightly below the average of 79.2% in the past 20 years. Continued gains in production will push capacity use higher, which means companies will have an increasing incentive to build out plant and equipment. Meanwhile, corporate profits and cash on the balance sheet show they have the ability to make these investments. In other news today, the Empire State manufacturing index, a measure of factory sentiment in New York, increased to +10.0 in February from -7.8 in January. The index is now the highest since last May. In other recent news, new claims for unemployment insurance fell 27,000 last week to 341,000. Lately, claims have been bouncing wildly around a four-week moving average of 353,000. Continuing claims for regular state benefits fell 130,000 to 3.11 million. These figures are consistent with continued moderate payroll growth in February.

Click here for a PDF version
Posted on Friday, February 15, 2013 @ 10:02 AM • Post Link Share: 
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.
Search Posts
 PREVIOUS POSTS
The Plow Horse State of the Economy
Retail Sales Increased 0.1% in January, Matching Consensus Expectations
Economy Not As Bad As Bears Think?
There the Bears Go Again
The Trade Deficit in Goods and Services came in at $38.5 Billion in December
Nonfarm Productivity (Output Per Hour) Declined at a 2.0% Annual Rate in Q4
The ISM non-manufacturing index declined to 55.2 in January
The Pessimists Are Losing
Optimism Is Winning
The ISM Manufacturing Index Rose to 53.1 in January from 50.2 in December
Archive
Skip Navigation Links.
Tags
 
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan
Copyright © 2014 All rights reserved.