| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 0.3% | -0.3% | -1.0% | -1.1% |
| Year over Year | -3.7% | -1.6% |
Highlights
Industrial production continued to contract in November. A 0.3 percent monthly fall followed a marginally steeper revised 1.1 percent drop in October and means that output has declined in each of the last three months and in five of the last seven. Annual workday adjusted growth was minus 3.7 percent, down from minus 1.6 percent and its worst reading since November 2020.
The monthly slide was attributable to weakness in energy (minus 4.5 percent), consumer goods (minus 0.4 percent) and intermediates (minus 0.3 percent). Just the capital goods category (0.1 percent) kept its head above water and remains the only subsector to record positive annual growth (1.8 percent).
Today's surprisingly soft update puts average industrial production in October/November 1.7 percent below its mean level in the third quarter and all but guarantees that the sector will subtract from fourth quarter GDP growth. However, an ECDI of minus 5 and an ECDI-P of 3 indicate that overall economic activity is running much as expected.
The monthly slide was attributable to weakness in energy (minus 4.5 percent), consumer goods (minus 0.4 percent) and intermediates (minus 0.3 percent). Just the capital goods category (0.1 percent) kept its head above water and remains the only subsector to record positive annual growth (1.8 percent).
Today's surprisingly soft update puts average industrial production in October/November 1.7 percent below its mean level in the third quarter and all but guarantees that the sector will subtract from fourth quarter GDP growth. However, an ECDI of minus 5 and an ECDI-P of 3 indicate that overall economic activity is running much as expected.
Market Consensus Before Announcement
Production is expected to increase 0.3 percent after a 1.0 percent fall in October.
Definition
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.
Description
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.
