{"id":387,"date":"2014-11-17T09:55:31","date_gmt":"2014-11-17T14:55:31","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=387"},"modified":"2014-12-05T16:57:16","modified_gmt":"2014-12-05T21:57:16","slug":"october-industrial-production","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=387","title":{"rendered":"October Industrial Production"},"content":{"rendered":"

KEY DATA:<\/strong> IP: -0.1%; Manufacturing: +0.2%; Mining: -0.9%<\/p>\n

IN A NUTSHELL:<\/strong> \u00c2\u00a0\u00c2\u00a0\u00e2\u20ac\u0153The manufacturing sector remains the rock on which the improving economy is being built, but it needs some help.\u00e2\u20ac\u009d<\/em><\/strong><\/p>\n

WHAT IT MEANS:<\/strong> \u00c2\u00a0The U.S. is the one shining economy in the universe of soft industrial nations.\u00c2\u00a0 The manufacturing sector has been critical to the continued growth and that remains the case as output rose in October.\u00c2\u00a0 There was a small decline in overall industrial production as mining and natural gas utility production fell sharply.<\/em><\/strong>\u00c2\u00a0 I guess no deed goes unpunished. \u00c2\u00a0Cratering energy prices may be helping consumers but they are hurting producers.<\/em><\/strong>\u00c2\u00a0 Still, we cannot complain since the additional money left in wallets rather than pumped into gas tanks is coming at the best time possible – the holiday shopping season.\u00c2\u00a0 On the manufacturing front, output gains were pretty much across the board<\/em><\/strong>.\u00c2\u00a0 The biggest weakness was in transportation.\u00c2\u00a0 Vehicle assembly rates have come down with the stabilizing sales pace.\u00c2\u00a0 <\/em><\/strong>Demand may be quite solid, but it was in the 16.3 million units range for three of the past four months and that stability may be causing vehicle makers to build more cautiously.\u00c2\u00a0 There was also a cut back in aerospace, but I doubt with Boeing\u00e2\u20ac\u2122s backlog, that will be sustained.\u00c2\u00a0 Improvements in technology may be helping consumers but the tech companies are having issues selling computers and output in that sector remains weak.<\/p>\n

A second positive manufacturing report released today was the New York Fed\u00e2\u20ac\u2122s Empire State survey, which showed that activity rebounded in early November after having declined in October.<\/em><\/strong>\u00c2\u00a0 The October drop was strange, having come after nine consecutive months of solid gains, so the return to growth was hardly a surprise. \u00c2\u00a0It reinforces the view that the manufacturing sector is still growing solidly.\u00c2\u00a0 \u00c2\u00a0\u00c2\u00a0<\/em><\/strong><\/p>\n

MARKETS AND FED POLICY IMPLICATIONS:<\/strong> Kermit complained that it was hard to be green, but the greenback is having no problems these days.\u00c2\u00a0 That is occurring, at least in part, because the rest of the industrial world is not in great shape.\u00c2\u00a0 Indeed, Japan slipped back into recession.\u00c2\u00a0 <\/em><\/strong>Neither the Fed nor investors will likely take that news very well, especially since the rise in manufacturing activity was nothing great. \u00c2\u00a0We are not talking about robust industrial output growth here.\u00c2\u00a0 Given the headwinds from the rest of the world, we need energy prices to stay low<\/em><\/strong> \u00e2\u20ac\u201c despite its negative impact on output in the energy sector.\u00c2\u00a0\u00c2\u00a0 Lower energy costs feed into consumer spendable income and a really good holiday shopping season would keep the economic acceleration going.<\/em><\/strong>\u00c2\u00a0 The Fed looks at energy costs more as an economic issue than an inflation factor.\u00c2\u00a0 So the easing in top line inflation will not matter very much but any jump in consumer spending will. \u00c2\u00a0Still, there are Fed members who are uncertain about the sustainability of a strong U.S. expansion and softening world growth and moderating manufacturing production is likely to add to those concerns.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: IP: -0.1%; Manufacturing: +0.2%; Mining: -0.9% IN A NUTSHELL: \u00c2\u00a0\u00c2\u00a0\u00e2\u20ac\u0153The manufacturing sector remains the rock on which the improving economy is being built, but it needs some help.\u00e2\u20ac\u009d WHAT IT MEANS: \u00c2\u00a0The U.S. is the one shining economy in the universe of soft industrial nations.\u00c2\u00a0 The manufacturing sector has been critical to the … Continue reading October Industrial Production<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,16],"tags":[],"class_list":["post-387","post","type-post","status-publish","format-standard","hentry","category-economic-indicators","category-industrial-production"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/387","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=387"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/387\/revisions"}],"predecessor-version":[{"id":388,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/387\/revisions\/388"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=387"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=387"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=387"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}