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IT: Industrial Production
| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | -0.4% | 1.5% | ||
| Year over Year | 1.2% | 1.2% to 2.4% | 3.2% | 1.4% |
Highlights
Industrial production contracted a seasonally adjusted 0.4 percent in December following a 1.5 percent expansion in November, while output was up 3.2 percent year-on-year on a calendar-adjusted basis. The year-on-year result was well above the Econoday median forecast which called for a 1.2 percent gain.
The only bright spots were increased production of capital goods which rose 0.5 percent, while energy was up 1.2 percent. Given the pullback in other major components, it suggests energy production was likely more for residential than industrial use.
Output for both consumer and durable goods fell 0.9 percent in December from the previous month, while intermediate goods fell 0.4 percent. Non-durables output showed the largest decline, contracting 1.3 percent in December.
For the year as a whole, production was down 0.2 percent over 2024, with energy production the only positive contribution, up 1.0 percent. The largest decline came for durable goods which fell 0.8 percent, followed by a 0.6 percent contraction for non-durables and intermediate goods.
There is no question production was subdued last year. Having ended the year on a negative note, it doesn't set a positive tone for this year. Taking a longer-term view, uncertainty remains around US tariffs and their legality, and while it appears that global trade is starting to realign it will take some time to see any benefits.
Market Consensus Before Announcement
Output seen up 1.2 percent on year in December after rising 1.4 percent in November.
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.