|Month over Month||0.2%||0.4%||1.0%|
|Year over Year||2.8%||1.9%||2.0%|
Goods production (ex-construction) managed a 0.4 percent monthly rise in March. This followed an unrevised 1.0 percent gain in February and lifted annual workday adjusted growth from 2.0 percent to 2.8 percent, its highest mark so far this year.
In line with February, March's monthly advance would have looked a good deal stronger but for a weak energy subsector; this time recording a 5.2 percent drop that effectively masked healthy gains elsewhere. In particular, consumer goods climbed 2.3 percent and capital goods 2.4 percent. Intermediates (0.4 percent) lagged but at least posted another rise.
Nonetheless, having seen overall industrial production drop a monthly 2.3 percent in January, the February/March recovery was only enough to limit a quarterly contraction to 0.3 percent. This came after a promising 1.1 percent rise in the fourth quarter. In fact, even in March output was still nearly 22 percent below its pre-Great Recession peak posted in August 2007. That said, non-energy goods output has made solid headway over the last couple of months and, according to the manufacturing PMI (56.2 and a 6-year high), made further significant progress in April. The momentum acquired during the first quarter looks to have been carried forward in which case the second quarter should look much better.
Industrial production measures the physical output of the nation's factories, mines and utilities. Construction is excluded. Approximately 4,100 companies provide data on more than 8,000 monthly flows of production.
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 will not 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. Like the PPI and the orders data, construction is excluded from the data. 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.