September 2017 Headline Industrial Production Improved

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 downward revision to the existing data over the last 6 months – so even though the data was better than last month, overall the improvement was very little. The best way to view this is the 3 month rolling averages which declined.

Manufacturing employment growth remains flat year-over-year.

Headline seasonally adjusted Industrial Production (IP) was up 0.3 % month-over-month and up 1.6 % year-over-year (note it was reported up 2.2 % last month).

Econintersect‘s analysis using the unadjusted data is that IP growth accelerated 0.5 % month-over-month, and is up 1.5 % year-over-year.

The unadjusted year-over-year rate of growth was down 0.1 % from last month using a three month rolling average, and is up 1.5 % year-over-year.

The market was expecting (from Bloomberg / Econoday):

Headline Seasonally Adjusted Consensus Range Consensus Actual IP (month over month change) -0.9 % to 0.8 % +0.1 % +0.3 % IP Subindex Manufacturing (month over month change) 0.0 % to 0.6 % +0.3 % +0.1 % Capacity Utilization 75.4 % to 76.5 % 76.2 % 76.0 %

IP headline index has three parts – manufacturing, mining and utilities – manufacturing was up 0.1 % this month (up 1.0 % year-over-year), mining up 0.4 % (up 9.8 % year-over-year), and utilities were up 1.5 % (down 4.1 % 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)