JP: Industrial Production

Sun Nov 29 17:50:00 CST 2015

Consensus Actual Previous
Month over Month 1.9% 1.4% 1.0%
Year over Year 0.3% -0.8%

October industrial Production increased 1.4 percent from the previous month and was up 0.3 percent from a year ago. This was the second consecutive month that output increased. General-purpose, production & business oriented machinery rebounded, increasing 5.8 percent after retreating for the previous three months. Transport equipment was up 4.0 percent after rising 0.8 percent in September. Electronic parts and devices increased for a second month, this time by 2.4 percent after climbing 5.9 percent.

According to the survey of production forecast in manufacturing, production is expected to increase 0.2 percent in November and decrease 0.9 percent in December. The data released over the weekend

In its decision to not boost its monetary stimulus efforts, the Bank of Japan noted industrial production was one area where the economy was just puttering along. They show how the BoJ has a tough decision on its hands, with respect to potentially ramping up its quantitative easing program. The monthly numbers look good, the yearly ones not so much.

Industrial production measures the physical output of the nation's factories, mines and utilities.

Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.

Industrial production provides key industry data for this export-dependent economy. The data are issued twice a month-a preliminary estimate at the end of the month for the preceding month and a revised estimate about two weeks later. All products, whether sold domestically or abroad, are included in the calculation of industrial production. Industrial production is highly sensitive to the business cycle and can often predict future changes in employment, earnings and income. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the economy. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.