Bloomberg is reporting Industrial Production Falls on Autos.
Manufacturing in the U.S. slumped further in November as exports tumbled and automakers slashed their assembly rate to the lowest level in more than 18 years.
Industrial production fell 0.6 percent, the third drop in four months, the Federal Reserve said today in Washington. The New York Fed reported the weakest factory performance in its region this month since its survey began in 2001.
Today’s figures may intensify pressure on the Bush administration to prevent a collapse of General Motors Corp., the biggest American carmaker. As consumer demand slides with higher unemployment and a cut-off of credit, manufacturing is poised to keep contracting into 2009, economists said.
The slide in manufacturing has idled almost one quarter of U.S. industrial capacity. The utilization rate, which measures actual production as a share of the maximum potential, fell to 75.4 percent, compared with an average of 79.7 percent in the past five years.
The nationwide industrial output report showed factory output, which accounts for four-fifths of industrial production, decreased 1.4 percent. Production of metals, furniture and construction supplies all dropped. Aircraft production was one of the only manufacturing categories showing gains during the month, as work resumed at Boeing Co. following a strike.
Industrial Production And Capacity Utilization
Let’s take a look at the official release of Industrial Production And Capacity Utilization for November.
Industrial production decreased 0.6 percent in November with declines widespread across industries. The drop in output in September was revised down, and the rebound in October was revised up, in large part because both the decrease due to the September hurricanes and the subsequent partial recovery in October were larger than previously reported.
The output of mines advanced 2.5 percent, primarily as a result of a further post-hurricane recovery in crude oil and natural gas operations in the Gulf of Mexico. Taken together, the rebounds after the strike and the hurricanes added almost 1 percentage point to the change in industrial production. The output of utilities rose 1.6 percent.
Among consumer durable goods, the decreases in production were broadly based: Automotive products dropped 2.6 percent; appliances, furniture, and carpeting fell 4.0 percent; home electronics moved down 1.7 percent; and miscellaneous goods declined 3.4 percent.
The output of business equipment rose 3.2 percent in November. The production of transit equipment jumped more than 40 percent after having plunged in September and October because of the strike in the commercial aircraft industry.
The only bright spots can be attributed to the end of the Boeing strike and a rebound in activity after hurricanes. Of course it is a fallacy to state there is any economic benefit derived from hurricanes or any other type of disaster.
Here are a couple of charts from the article.
Industrial production, capacity, and utilization
click on chart for sharper image
click on chart for sharper image
Durable goods, construction, and non-energy industrial materials are dropping sharply. Defense is going strong. Things might be a lot different under Obama given his stated desire to rebuild infrastructure and pull troops out of Iraq.
New York Manufacturing Index Falls to Minus 25.8
The Federal Reserve Bank of New York is reporting New York Manufacturing Index Falls to Minus 25.8
Manufacturing in New York contracted in December at the fastest pace on record as orders and shipments remained weak.
The Federal Reserve Bank of New York’s general economic index fell to minus 25.8, the lowest level since records began in 2001, from minus 25.4 in November, the bank said today. Readings below zero for the Empire State index signal manufacturing activity is shrinking.
Factories are scaling back production as consumers retrench in the face of a weaker job market and a recession that began a year ago. A deepening global credit crisis has hit overseas trading partners, undermining foreign demand for U.S. goods.
The New York Fed’s measure of new orders rose to minus 20.8 from minus 22.2 the prior month. A gauge of shipments increased to minus 8.8 from minus 13.9.
The report also showed inflation eased. The index of prices paid for raw materials decreased to minus 7.5 from 20.5 and the gauge of prices received dropped to minus 11.7, the lowest since July 2003, from 6.
A measure of employment rose to minus 23.4 from minus 28.9, the lowest reading since December 2001.
Prices paid are dropping and will continue to drop as year over year comparisons get easier. Deflation is here. Falling prices are a symptom of that deflation.
Mike “Mish” Shedlock
Click Here To Scroll Thru My Recent Post List