Industrial production edged up 0.1 percent on the month in August, slightly undershooting expectations. Although capital goods and intermediate goods fell 2.5 percent and 2.8 percent respectively, this was offset by a rise in energy (2.3 percent) and consumer goods (2.8 percent).

Year-over-year, intermediate goods and capital goods were particularly weak with falls of 7.2 percent and 7.3 percent respectively, making for a headline drop of 3.2 percent. By contrast, energy rose 6.0 percent.

In sum, goods production remains soft with a recovery that is both uneven and fragile. Today's report leaves the Italian RPI at minus 11 and the RPI-P at minus 15, extending recent the period of overall economic underperformance versus market expectations.

Goods production is expected to rise 0.2 percent on the month, reversing only a fraction of July's surprisingly sharp 0.9 percent drop.

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.