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 Declined 0.2% in October
Posted Under: Data Watch • Industrial Production - Cap Utilization

 
Implications: Please feel free to ignore the weak headline for overall industrial production in October; the details of the report show strength. Overall production declined 0.2% in October, but all of the loss was due to utilities and mining, neither of which will stay persistently weak in the year ahead. Utility output dropped by 2.5% as October temperatures in the lower 48 states were the warmest for any October since 1963. Meanwhile, given oil price declines in the past year, mining continues to be a headwind for the economy, dropping 1.5% in October, led by a 1.5% decline in oil and gas extraction. 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. And as oil prices bottom out, drilling activity should start to climb again, even if oil prices stay low relative to recent years. Taking out mining and utilities gives us manufacturing which was up 0.4% in October and up 0.7% including upward revisions to prior months. Auto production grew 0.7%, but even excluding autos manufacturing was still up 0.4%, a very solid number. In fact manufacturing ex-autos is accelerating, up at a 1.9% annual rate in the past three months versus a 1.3% gain in the past year. The fundamentals favor further acceleration in the year ahead. Companies are sitting on huge cash reserves and corporate cash flow is at a record high. In other manufacturing news yesterday, the Empire State index, a measure of manufacturing sentiment in New York, came in at -10.7 in November, versus -11.4 in October. On the housing front, the NAHB index, which measures confidence among home builders, declined to a still strong 62 in November versus 65 in October.

Click here for PDF version
Posted on Tuesday, November 17, 2015 @ 10:18 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.
 
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 © 2020 All rights reserved.