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

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 rises 0.8% in December

 
Implications:  The surprisingly strong increase in industrial production in December was largely powered by a 4.2% increase in utility output, a function of unusually cold weather on the East Coast.  However, manufacturing still expanded a robust 0.4% in December, the sixth consecutive increase.  Moreover that 0.4% gain in manufacturing came with no help from the auto sector, which reduced production slightly.  The recent negative trend for auto production will not continue.  Auto sales were up substantially in 2010 and are likely to continue to improve in 2011.  That's why analysts are already forecasting a hefty increase in activity at automakers in the first quarter.  In mid-2009, capacity utilization was at a 45-year low of 68.2%.  Now, only 18 months later, capacity utilization is almost 8 percentage points higher, at 76%.  Two factors are boosting utilization: expanding output and a depreciating capital stock.  In fact, because of depreciation, total capacity (the ability to produce) in manufacturing has fallen back down to 2007 levels.  We expect capacity utilization to climb to near the long-term average of 80% by later this year, compelling companies to accelerate investment in plant and equipment.   

Click here to view the entire report.
Posted on Friday, January 14, 2011 @ 12:25 PM • 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.
 
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 advisors are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
Home |  Important Legal Information |  Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2019 All rights reserved.