September 2018 Industrial Production Continues To Improve

The headlines say seasonally adjusted Industrial Production (IP) improved month-over-month. Our analysis shows the three month rolling averages significantly improved.

Analyst Opinion of Industrial Production

There was insignificant upward revision to last month’s data. 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 rate of growth is accelerating year-over-year.

Headline seasonally adjusted Industrial Production (IP) was up 0.3 % month-over-month and up 5.1 % year-over-year.

Econintersect‘s analysis using the unadjusted data is that IP growth accelerated 0.3 % month-over-month, and is up 5.2 % year-over-year.

The unadjusted 3 month rolling average year-over-year rate of growth accelerated 0.6 % from last month, and is up 4.7 % year-over-year.

The market was expecting (from Econoday):

Headline Seasonally Adjusted Consensus Range Consensus Actual IP (month over month change) +0.0 % to 0.4 % +0.2 % +0.3 % IP Subindex Manufacturing (month over month change) +0.0 % to 0.3 % +0.2 % +0.2 % Capacity Utilization 77.9 % to 78.3 % 78.2 % 78.1 %

IP headline index has three parts – manufacturing, mining and utilities – manufacturing was up 0.2 % this month (up 3.5 % year-over-year), mining up 0.5 % (up 13.4 % year-over-year), and utilities were up 0.0 % (up 5.4 % 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)