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October 2017 Headline Industrial Production Significantly Improved

By Kurt Osterberg · On November 16, 2017

The headlines say seasonally adjusted Industrial Production (IP) was up. The manufacturing segment of industrial production also improved.

Analyst Opinion of Industrial Production

There was significant upward revision to the existing data over the last 6 months – so even though the data was better than last month, it is even better when compared to the upward backward revisions. The best way to view this is the 3 month rolling averages which improved. Industrial production is in a long term upward trend.

Manufacturing employment growth remains flat year-over-year…

Headline seasonally adjusted Industrial Production (IP) was up 0.9 % month-over-month and up 2.9 % year-over-year.

Econintersect‘s analysis using the unadjusted data is that IP growth accelerated 0.8 % month-over-month, and is up 2.8 % year-over-year.

The unadjusted year-over-year rate of growth was up 0.2 % from last month using a three month rolling average, and is up 2.0 % year-over-year.

The market was expecting (from Bloomberg / Econoday):

Headline Seasonally Adjusted Consensus Range Consensus Actual IP (month over month change) 0.3 % to 1.2 % +0.5 % +0.9 % IP Subindex Manufacturing (month over month change) 0.2 % to 0.9 % +0.3 % +1.3 % Capacity Utilization 76.1 % to 76.9 % 76.3 % 77.0 %

IP headline index has three parts – manufacturing, mining and utilities – manufacturing was up 1.3 % this month (up 2.5 % year-over-year), mining down 1.3 % (up 6.4 % year-over-year), and utilities were up 2.0 % (up 0.9 % year-over-year). Note that utilities are 10.8 % of the industrial production index, whilst mining also is 10.8 %.

Comparing Seasonally Adjusted Year-over-Year Change of the Industrial Production Index (blue line) with Components Manufacturing (red line), Utilities (green line), and Mining (orange line)