Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       

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

Implications:  Today's data on industrial production were mediocre, but don't expect that to last.  Production dipped 0.2% in November, but was up 0.1% including revisions to prior months, matching consensus expectations.  The primary reason for the decline in November was the auto sector, which is volatile from month to month and where output fell 3.5%.  In addition, high-tech production continued its recent swoon.  This is due to major flooding in Thailand, one of the world's leading producers of hard disk drives and semiconductors.  Still, even excluding autos and high-tech, manufacturing production was down 0.1% in November.  However, we would not read much into that small decline.  During periods of economic expansion, this figure goes down about four months every year and we expect a rebound in overall production in the months ahead.  Auto inventories are very thin and problems in Thailand will recede.  Timely news on the manufacturing sector already shows a rebound in December.  The Empire State index, a measure of activity in New York, increased to +9.5 from +0.6 in November.  The Philly Fed index, a measure of activity in that region, increased to +10.3 from +3.6.  Both indices easily beat consensus expectations.  Corporate profits and cash on the balance sheets of non-financial companies are both at record highs.  Meanwhile, capacity utilization is close to long-term norms.  As a result, business investment in equipment, which is already at a record high, is likely to continue to trend upward in the year ahead, regardless of whether the federal government maintains full expensing for tax purposes in 2012.

Click here for a printable version.
Posted on Thursday, December 15, 2011 @ 1:22 PM • 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.