"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Wednesday, February 16, 2011

Industrial Production and Capacity

The last major metric moving the morning[1] is industrial production and capacity, a look at how much our[2] factories are producing and how many of our factories are involved in that production. The market likes this because, let's face it, a nation depends on production of actual goods to be competitive and useful in the world. For December, industrial production was up 0.8% and the capacity utilization rate hit a level of 76.0%. The analysts are feeling guardedly optimistic for January, predicting a 0.5% increase in production and the capacity utilization rate rising to 76.3%.
The Federal Reserve, in their report, has chosen to rain on the analyst's parade. On the up side, they revised December industrial production upwards to 1.2%. On the down side, January industrial production actually fell 0.1% while the capacity utilization rate slipped 20 bps to a level of 76.1%. So no real joy there.
[1] Whee! Alliteration!
[2] And by "our" I mean "US".

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