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 2.2% in February
Posted Under: Data Watch • Industrial Production - Cap Utilization • Inflation • COVID-19
Supporting Image for Blog Post

 
Implications:  Industrial production plummeted in February, with severe winter weather from the recent polar vortex causing nearly every major category to post declines and the headline index to fall for the first time in five months.  According to the Federal Reserve, it looks like petroleum refineries, petrochemical facilities, and plastic resin plants were hit the hardest by the deep freeze. This heavily impacted both the manufacturing and mining series which fell 3.1% and 5.4%, respectively.  Excluding the effects of the winter storm, these series would have posted a decline of 0.5% and a gain of 0.5%, respectively.  After February's setback, industrial production is now down 4.2% from pre-pandemic levels, and there continues to be a wide gulf between the production and consumption sides of the US economy, which creates conditions for rising inflation. For example, consumer spending data out this morning show retail sales excluding the widely shutdown restaurant sector are now up 9.6% from pre-pandemic levels.  COVID-19 has clearly shifted consumer preferences from services (like travel, dining, or attending sporting events) toward goods, and that means a continued rebound in industrial production will be necessary to meet demand going forward. The one source of strength in February came from utilities where activity rose 7.3%, with both electric power generation and transmission as well as natural gas distribution posting large gains as consumers dialed up energy usage to keep their homes heated.  Look for the recent upward trend in industrial production to reassert itself in the months ahead as we leave behind the temporary effects of the polar vortex.  In other recent factory-related news, the Empire State Index, a measure of New York factory sentiment, rose to +17.4 in March from +12.1 in February. This is the highest reading for the index since late 2018, and the major driver of the March increase was prices manufacturers reported paying for materials and receiving for finished products, which both rose to the highest levels since 2011, signaling rising inflationary pressure.

Click here for a PDF version
Posted on Tuesday, March 16, 2021 @ 12:14 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.
Search Posts
 PREVIOUS POSTS
Inflation and The Fed
Coronavirus High Frequency Data 03/12/2021
The Producer Price Index (PPI) Rose 0.5% in February
COVID-19 Tracker 03/11/21
The Consumer Price Index (CPI) Rose 0.4% in February
Coronavirus High Frequency Data 03/09/21
Fearing Fear Itself
The Fed Can’t Fix COVID Lockdowns
The Trade Deficit in Goods and Services Came in at $68.2 billion in January
Nonfarm Payrolls Increased 379,000 in February
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
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.