IT: Industrial Production

Highlights

Industrial production rose a seasonally-adjusted 0.1 percent in February when output fell 0.6 percent. Year-on-year production increased 0.5 percent, almost making up for the 0.6 percent contraction in February.

Compared to February of last year, manufacture of transportation equipment increased 10.0 percent, while the manufacture of computers and electronic production were 7.8 percent higher.

Chemical products output fell 6.8 percent, coke and petroleum products were 6.4 percent lower followed by a 5.8 percent decline for"other" manufacturing.

Some of the PMI data for March suggest that with the outbreak of hostilities in the middle east, companies were ratcheting up production ahead of anticipated supply chain constraints.

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.

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