Industrial Production & Capacity Utilization

Industrial Production and Capacity Utilization Increase in September

by Glenn Busch October 17, 2011
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Changes in the Industrial Production highlight the underlying demand for U.S. goods and services. Given other recent weak economic news it is a sign of health that production continues to increase and the demand for goods is still there.

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Industrial Production and Capacity Utilization Both Increase in August

by Glenn Busch September 15, 2011
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Industrial production is a key gauge on the health of the overall U.S. economy. If production is growing the economy is growing. The U.S. economy experienced strong production gains from the lows set back in the financial crisis but now growth is harder to come by. However, any growth is good and the positive gain in the production number is a good sign that, while still slowing down, the U.S. economy is still currently growing.

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A Better Than Expected Industrial Production and Capacity Utilization Report

by Glenn Busch August 16, 2011
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The secondary aspect we can gleam from the capacity utilization report is the potential for inflation. When there is excess capacity businesses are discouraged to invest. Capacity utilization rates below 80, where we are now, correlate with low inflation environments. Another reason why the bond market is only pricing in 2.6% inflation when measuring the 10 Year TIPs break-even rate, the spread between 10 Year U.S. Treasuries and 10 Year TIPs.

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Industrial Production and Capacity Utilization Remain Flat

by Glenn Busch July 15, 2011
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The last economic report out today that I’ll cover is the Industrial Production and Capacity Utilization report from the Federal reserve. The report measures the monthly changes in U.S. manufacturing output. It is a good gauge on the overall health of the U.S. economy and increases or decreases in production reflect changes in the demand for goods and services.

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Industrial Production & Capacity Utilization, Stalled Growth

by Glenn Busch June 15, 2011
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The average capacity utilization is 80% and the U.S. manufacturing industry is only using 76.7%. This is still a lot of slack in the economy and unused capacity is a discouragement for business investment. Lower investments by businesses equates to lower economic growth and lower inflation pressures. The Federal Reserve pays close attention to the slack in production and this weak report further supports their acommodative monetary policy.

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