The string of good news in industrial production snapped at one month. The Fed’s Industrial Production and Capacity Utilization report shows Industrial production decreased 0.6 percent in March after increasing 0.1 percent in February.
For the first quarter of 2015 as a whole, industrial production declined at an annual rate of 1.0 percent, the first quarterly decrease since the second quarter of 2009. The decline last quarter resulted from a drop in oil and gas well drilling.
In March, manufacturing output moved up 0.1 percent for its first monthly gain since November; however, factory output in January is now estimated to have fallen 0.6 percent, about twice the size of the previously reported decline. The index for mining decreased 0.7 percent in March. The output of utilities fell 5.9 percent to largely reverse a similarly sized increase in February, which was related to unseasonably cold temperatures.
Capacity Utilization Underperforms Expectations
Economists at least got the direction correct. Nonetheless, the Bloomberg Industrial Production Consensus was -0.3 percent, once again too optimistic.
In January, December and November were revised sharply lower. This month, January was revised lower. If March is revised lower next month, there was no string of good news on industrial production at all.
Mike “Mish” Shedlock